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What changed in NETGEAR, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NETGEAR, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+422 added−392 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in NETGEAR, INC.'s 2025 10-K

422 paragraphs added · 392 removed · 303 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+37 added−36 removed43 unchanged
Biggest changeCustomer Premise Equipment • WiFi routers: devices that connect to a modem to enable wireless Internet connectivity; • WiFi Mesh Systems: devices with one main Wi-Fi router and multiple additional Wi-Fi nodes that work together, i.e. a local area network (“LAN”), to provide extensive coverage under a unified network; • Broadband modems: devices that convert the broadband signals into Ethernet data that feeds internet into homes and small businesses; • WiFi Gateways: WiFi routers with an integrated broadband modem, for broadband internet access; and • Network accessories: WiFi range extenders, which extend the range of an existing WiFi network to eliminate WiFi dead spots; Powerline adapters, which extend wired and WiFi internet connections to any AC outlet using existing electrical wiring; and WiFi network adapters, which enable computing devices to be connected to the network via WiFi.
Biggest changeThe products and services are sold primarily via our direct online store as well as traditional retailers, increasingly leveraging their online presence, in addition to their brick-and-mortar stores, and service provider channels and include: • WiFi Mesh Systems: devices with one main Wi-Fi router and multiple additional Wi-Fi nodes that work together, i.e. a LAN, to provide extensive coverage under a unified network; • WiFi routers: devices that connect to a modem to enable wireless Internet connectivity; • Broadband modems: devices that convert the broadband signals into Ethernet data that feeds internet into homes and small businesses; • WiFi Gateways: WiFi routers with an integrated broadband modem, for broadband internet access; • Mobile Hotspots: portable battery-powered Wi-Fi access points that allow users to connect their devices to the internet using a cellular connection; • Network accessories: WiFi range extenders, which extend the range of an existing WiFi network to 6 Table of Contents eliminate WiFi dead spots; Powerline adapters, which extend wired and WiFi internet connections to any AC outlet using existing electrical wiring; and WiFi network adapters, which enable computing devices to be connected to the network via WiFi; and • Value-added service offerings such as security and privacy, technical support, and parental controls for consumers.
These products typically include higher port counts, higher data transfer rates and other performance characteristics designed to meet the needs of a modern business. For example, our business products provide data transfer rates up to 100 gigabits per second to meet the higher capacity requirements.
These products typically include higher port counts, higher data transfer rates and other performance characteristics designed to meet the needs of a modern business. For example, our business products provide data transfer rates up to 100 gigabits per second to meet higher capacity requirements.
Other Regulations As a company with global operations, we are subject to complex foreign and U.S. laws and regulations, including trade regulations, tariffs, import and export regulations, anti-bribery and corruption laws, antitrust or competition laws, data privacy laws, such as the EU General Data Protection Regulation (the “GDPR”), and environmental regulations, among others.
Other Regulations As a company with global operations, we are subject to complex foreign and U.S. laws and regulations, including trade regulations, tariffs, import and export regulations and licensing requirements, anti-bribery and corruption laws, antitrust or competition laws, data privacy laws, such as the EU General Data Protection Regulation (the “GDPR”), and environmental regulations, among others.
Our products that target the business market are generally designed with an industrial appearance, including metal cases and, for some product categories, the ability to mount the product within standard data networking racks as well as unique mounting solutions for other uses.
Our products that target the business market are generally designed with an industrial appearance, including metal cases and, for some product categories, the ability to mount the product within standard data networking racks as well as alternative mounting solutions for other uses.
Our website provides a link to our SEC filings, which are available free of charge on the same day such filings are made. The specific location on the website where these reports can be found is http://investor.netgear.com/sec.cfm.
Our website address is www.netgear.com . Our website provides a link to our SEC filings, which are available free of charge on the same day such filings are made. The specific location on the website where these reports can be found is http://investor.netgear.com/sec.cfm.
No single patent is solely responsible for protecting the Company's products and services. In addition, we currently have approximately 14 pending United States and foreign patent applications related to technology and products offered by us.
No single patent is solely responsible for protecting the Company's products and services. In addition, we currently have approximately 15 pending United States and foreign patent applications related to technology and products offered by us.
Before joining NETGEAR, from December 2023 to June 2024, he was an EIR (Entreprneur in Residence) at Storm Ventures, a venture capital firm. From October 2021 to December 2023, he was the Group Vice President and General Manager for the Cognitive Campus business at Arista Networks, a computer networking company. Prior to that, Mr.
Before joining NETGEAR, from December 2023 to June 2024, Mr. Badjate was an EIR (Entrepreneur in Residence) at Storm Ventures, a venture capital firm. From October 2021 to December 2023, he was the Group Vice President and General Manager for the Cognitive Campus business at Arista Networks, a computer networking company. Prior to that, Mr.
We work directly with our retail channels on market development activities, such as co-advertising, online promotions and video demonstrations, instant rebate programs, event sponsorship and sales associate training. Our largest retailers include Amazon.com, Inc, Best Buy Co., Inc., Wal-Mart Stores, Inc. and their respective affiliates. DMRs and VARs.
We work directly with our retail channels on market development activities, such as co-advertising, online promotions and video demonstrations, instant rebate programs, event sponsorship and sales associate training. Our largest retailers include Amazon.com, Inc, Best Buy Co., Inc., Wal-Mart Inc. and their respective affiliates. DMRs and MSPs.
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.
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 believe that every team member has the potential to contribute significantly to our company's success, and we set exceptionally high standards of performance, making it the baseline expectation. To enable impactful performance, we have established clear performance metrics and objectives that align with our strategic goals.
We believe that every team member has the potential to contribute significantly to our company's success, and we set exceptionally high standards of performance, making it the baseline expectation. To enable impactful performance, we have established clear performance metrics and objectives that align with our strategic 12 Table of Contents goals.
Our own product quality organization based in Singapore and Taiwan is responsible for auditing and inspecting product quality on the premises of our ODMs to maintain quality standards for our suppliers. 9 Table of Contents We obtain several key components from limited or sole sources.
Our own product quality organization based in Singapore and Taiwan is responsible for auditing and inspecting product quality on the premises of our ODMs to maintain quality standards for our suppliers. We obtain several key components from limited or sole sources.
Talent Acquisition and Development 12 Table of Contents Our global Talent Acquisition strategy focuses on attracting top talent through a variety of channels including direct recruiting via our internal team, leveraging technology and tools, employee referral programs and university partnerships.
Talent Acquisition and Development Our global Talent Acquisition strategy focuses on attracting top talent through a variety of channels including direct recruiting via our internal team, leveraging technology and tools, employee referral programs and university partnerships.
This shift has contributed to growing the market for lower port count switches and our NETGEAR for Business wireless offerings. Security requirements within our products for business broadband access include firewall and VPN capabilities to aid in securing interactions between remote offices and business headquarter locations over the internet.
This shift has contributed to growing the market for lower port count switches and our Enterprise wireless offerings. Security requirements within our products for business broadband access include firewall and VPN capabilities to aid in securing interactions between remote offices and business headquarters locations over the internet.
Our potential competitors include other consumer electronics vendors, including Apple, Lifelock, LG Electronics, McAfee, Microsoft, Panasonic, Sony, Toshiba and Vizio, who could integrate networking and streaming capabilities into their line of products, such as televisions, set top boxes and gaming consoles, and our channel customers who may decide to offer self-branded networking products.
Our potential competitors include other consumer electronics vendors, including Apple, Gen Digital (formerly NortonLifelock), LG Electronics, McAfee, Microsoft, Panasonic, Sony, Toshiba and Vizio, who could integrate networking and streaming capabilities into their line of products, such as televisions, set top boxes and gaming consoles, and our channel customers who may decide to offer self-branded networking products.
Before joining NETGEAR in 2001, he worked in public accounting at Deloitte and Touche LLP. He holds a B.A. from the University of California, Santa Barbara, and is licensed as a Certified Public Accountant (inactive). 13 Table of Contents Pramod Badjate has served as our President and General Manager of NETGEAR for Business since July 2024.
Before joining NETGEAR in 2001, he worked in public accounting at Deloitte and Touche LLP. He holds a B.A. from the University of California, Santa Barbara, and is licensed as a Certified Public Accountant (inactive). Pramod Badjate has served as our President and General Manager of Enterprise (formerly NETGEAR for Business) since July 2024.
The largest portion of our net revenues was derived from the Americas, representing approximately 68%, 68% and 66% of net revenue in the years ended December 31, 2024, 2023 and 2022, respectively. We have continuously committed resources to our international operations and sales channels.
The largest portion of our net revenues was derived from the Americas, representing approximately 68% of net revenue in the years ended December 31, 2025, 2024 and 2023. We have continuously committed resources to our international operations and sales channels.
For further information regarding these risks, refer to Item 1A, Risk Factors, of Part I of this Annual Report on Form 10-K. For information regarding our significant customers, refer to Note 11, Segment Information, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For further information regarding these risks, refer to Item 1A, Risk Factors, of Part I of this Annual Report on Form 10-K. 5 Table of Contents For information regarding our significant customers, refer to Note 12, Segment Information, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
We primarily rely on a combination of copyright, trademark, trade secret, and patent laws, nondisclosure agreements with employees, consultants and suppliers and other contractual provisions to establish, maintain and protect our proprietary rights. We hold approximately 152 issued United States patents that expire between years 2025 and 2040 and 22 foreign patents that expire between 2025 and 2035.
We primarily rely on a combination of copyright, trademark, trade secret, and patent laws, nondisclosure agreements with employees, consultants and suppliers and other contractual provisions to establish, maintain and protect our proprietary rights. We hold approximately 139 issued United States patents that expire between years 2026 and 2044 and 17 foreign patents that expire between 2026 and 2035.
For further discussion of how government regulations may affect our business, see the related discussion in “Risk Factors – Financial, Legal, Regulatory and Tax Compliance Risks, Including Recent Impairment Charges.” Human Capital As of December 31, 2024, we had 655 full-time employees, with 223 in sales, marketing and technical support, 235 in research and development, 76 in operations, and 121 in finance, information systems and administration.
For further discussion of how government regulations may affect our business, see the related discussion in “Risk Factors – Financial, Legal, Regulatory and Tax Compliance Risks, Including Recent Impairment Charges.” Human Capital As of December 31, 2025, we had 784 full-time employees, with 235 in sales, marketing and technical support, 346 in research and development, 77 in operations, and 126 in finance, information systems and administration.
Our DMRs and VARs generally purchase our products through our wholesale distributors and audio-visual manufacturers that purchase our switches to include in their complete solutions. Broadband Service Providers. We also supply directly to broadband service providers in the United States and internationally providing DSL, WiFi and 4G/5G mobile broadband products.
Our DMRs and MSPs generally purchase our products through our wholesale distributors and audio-visual manufacturers that purchase our switches to include in their complete solutions. Broadband Service Providers. We supply products directly to broadband service providers in the United States and internationally providing WiFi, and 4G/5G mobile broadband products. Service providers supply our products to their business and home subscribers.
Accordingly, we are subject to a number of 5 Table of Contents risks related to international operations such as macroeconomic and microeconomic conditions, geopolitical instability, governmental regulations, preference for locally branded products, exchange rate fluctuations, increased difficulty in managing inventory, challenges of staffing and managing foreign operations, the effect of international sales on our tax structure, and changes in local tax laws.
Accordingly, we are subject to a number of risks related to international operations such as macroeconomic and microeconomic conditions, geopolitical developments, regulatory requirements, preference for locally branded products, exchange rate fluctuations, increased difficulty in managing inventory, challenges of staffing and managing foreign operations, the effect of international sales on our tax structure, and changes in local tax laws.
Information About Our Executive Officers The following table sets forth the names, ages and positions of our executive officers as of February 7, 2025. Name Age Position Charles (CJ) Prober 53 Chief Executive Officer Bryan D.
Information About Our Executive Officers The following table sets forth the names, ages and positions of our executive officers as of February 6, 2026. Name Age Position Charles (CJ) Prober 54 Chief Executive Officer Bryan D.
Our newest Power over Ethernet (“PoE”) switches, including cloud managed and unmanaged switches, provide elevated power budgets and uninterrupted PoE power for businesses of all sizes to address the growing need for deployment of multiple PoE devices with more power, due to the widespread adoption of IP communication, security cameras, WiFi access points, proximity sensors, and various other new applications.
Our Power over Ethernet (“PoE”) switches, including cloud managed and unmanaged switches, provide elevated power budgets and reliable PoE power for businesses of all sizes to address the growing need for deployment of multiple PoE devices with higher power requirements, driven by widespread adoption of IP communication, security cameras, WiFi access points, proximity sensors, and various other applications.
We have policies and procedures in place to promote compliance with these laws and regulations. To date, our compliance actions and costs relating to these laws, rules and regulations have not resulted in a material cost 11 Table of Contents or effect on our capital expenditures, earnings or competitive position.
These laws are evolving rapidly. We have policies and procedures in place to track and promote compliance with these laws and regulations. To date, our compliance actions and costs relating to these laws, rules and regulations have not resulted in a material cost or effect on our capital expenditures, earnings or competitive position.
However, increasingly we are seeing products designed for businesses move through these channels. We sell directly to, or enter into consignment arrangements with, a number of our traditional retailers, increasingly leveraging their online presence in addition to their in-store space and online retailers. The remaining traditional retailers, as well as our online retailers, are fulfilled through wholesale distributors.
We sell directly to, or enter into consignment arrangements with, a number of our traditional retailers, increasingly leveraging their online presence in addition to their in-store space and online retailers. The remaining traditional retailers, as well as our online retailers, are fulfilled through wholesale distributors.
IP provides an economical path to building high performance, scalable AV networks. As a result of the hybrid work model, there continues to be a shift in demand and use cases for NETGEAR for Business products as more small businesses now run out of homes or remote offices.
IP provides an economical path to building high performance, scalable AV networks. As work patterns continue to evolve, there continues to be a shift in demand and use cases for Enterprise products as more small businesses now run out of homes or remote offices.
Government regulations are subject to change, and accordingly we are unable to assess the possible effect of compliance with future requirements or whether our compliance with such regulations will materially impact our business in the future.
Government regulations are subject to change, and accordingly we are unable to assess the possible effect of compliance with future requirements or whether our compliance with such regulations will materially impact our business in the future. In addition, new laws and/or regulations could be subject to unforeseen interpretation to the detriment of our business.
Our principal competitors include: • within the business markets, companies such as Allied Telesys, Arista, Barracuda, Buffalo, Cisco Systems, Dell, D-Link, Extreme, Fortinet, Hewlett-Packard Enterprise Aruba, Juniper Networks Mist, Mellanox (owned by Nvidia), Palo Alto Networks, QNAP Systems, Ruckus (owned by CommScope), SonicWall, Snap AV, Synology, TP- Link, TRENDnet, Ubiquiti, and WatchGuard; • within the consumer markets, companies such as ARRIS, ASUS, AVM, Devolo, D-Link, Eero (owned by Amazon), Linksys (owned by Foxconn), Minim (Motorola licensee), Google WiFi, Samsung, and TP- Link; and • within the service provider markets, companies such as Actiontec, Airties, Arcadyan, ARRIS, ASUS, AVM, Compal Broadband, D-Link, Eero (owned by Amazon), Franklin, Google, Hitron, Huawei, Inseego, Nokia, Orbic, Plume, Sagem, Sercomm, Sonim, SMC Networks, TechniColor, TP-Link, Ubee, ZTE and ZyXEL.
Our principal competitors include: 7 Table of Contents • within the enterprise markets, companies such as Allied Telesis, Arista, Barracuda (owned by KKR), Buffalo, Cisco Systems, Dell, D-Link, Extreme, Fortinet, Huawei, Hewlett-Packard Enterprise ("HPE") Aruba, Juniper Networks Mist (part of HPE), Mellanox (owned by Nvidia), Palo Alto Networks, QNAP Systems, Ruckus Networks (formerly CommScope; Vistance Networks portfolio), SonicWall, Snap One (formerly SnapAV; owned by Resideo), Synology, TP- Link, TRENDnet, Ubiquiti, and WatchGuard; • within the consumer markets, companies such as Aracknis, ARRIS (owned by Vantiva), ASUS, AVM, Devolo, D-Link, Eero (owned by Amazon), GlocalMe, Linksys (owned by Foxconn), Motorola, Google Nest, RoamFi, Samsung, and TP- Link; and • within the service provider markets, companies such as Actiontec, Airties, Arcadyan, ARRIS, ASUS, AVM, Compal Broadband, D-Link, Eero (owned by Amazon), Franklin, Google, Hitron, Huawei, Inseego, Nokia, Orbic, Plume, Sagem, Sercomm, Sonim, SMC Networks, TP-Link, Ubee, Vantiva (formerly Technicolor), ZTE and Zyxel.
Unmanaged and Plus Ethernet Switches • General purpose Ethernet switches (in a wide range of sizes): used to connect equipment, devices, or WiFi access points to the network for exchanging information. 6 Table of Contents Connected Home.
Unmanaged and Easy Smart Ethernet Switches • General purpose Ethernet switches (in a wide range of sizes): used to connect equipment, devices, or WiFi access points to the network for exchanging information. Consumer.
Seasonal Business We have historically experienced increased net sales in our third and fourth fiscal quarters as compared to the first and second quarters in our fiscal year due to seasonal demand from consumer markets primarily relating to the beginning of the school year and the holiday season. In recent years, we had a flatter trend than we historically observe.
Seasonal Business We have historically experienced increased net sales in our third and fourth fiscal quarters compared to the first and second quarters in our fiscal year, primarily due to seasonal demand in consumer markets related to the beginning of the school year and the holiday season.
Murray 50 Chief Financial Officer Pramod Badjate 54 President and General Manager, NETGEAR for Business Graeme McLindin 55 Vice President, Mobile Charles (CJ) Prober has served as our Chief Executive Officer and a member of the board of directors since January 2024. Prior to joining the Company, Mr. Prober served as President of Life360, Inc.
Murray 51 Chief Financial Officer Pramod Badjate 55 President and General Manager, Enterprise Jonathan Oakes 53 Senior Vice President, Consumer Charles (CJ) Prober has served as our Chief Executive Officer and a member of the board of directors since January 2024. Prior to joining the Company, Mr. Prober served as President of Life360, Inc.
He holds a bachelor's degree in engineering from the National Institute of Technology, Karnataka, and a master's in computer science and an MBA from Arizona State University. Graeme McLindin has served as our Vice President of Mobile since January 2025.
He holds a bachelor's degree in engineering from the National Institute of Technology, Karnataka, and a master's in computer science and an MBA from Arizona State University. Jonathan Oakes has served as our Senior Vice President of Consumer since June 2025. Before joining NETGEAR, Mr.
If these sources fail to satisfy our supply requirements or component lead times deviate from expectations, our ability to meet scheduled product deliveries would be harmed and we may lose sales and experience increased costs to procure supply. We currently outsource warehousing and distribution logistics to four main third-party providers who are responsible for warehousing, distribution logistics and order fulfillment.
If these sources fail to satisfy our supply requirements or component lead times deviate from expectations, our ability to meet scheduled product deliveries would be harmed and we may lose sales and experience increased costs to procure supply.
Wholesale Distributors. Our distribution channel supplies our products to retailers, e-commerce resellers, DMRs, VARs and broadband service providers. We sell directly to our distributors, the largest of which are Ingram Micro, Inc., TD Synnex, and D&H Distributing Company. Retailers. Our retail channel primarily supplies products that are sold into the consumer market.
We sell directly to our distributors, the largest of which are TD SYNNEX, Ingram Micro, Inc., and D&H Distributing Company. Retailers. Our retail channel primarily supplies products sold into the consumer market, and increasingly selected products designed for businesses.
Product Offerings Our goal is to power extraordinary experiences where people collaborate and connect to a world of information and innovation.
Product Offerings Our goal is to power extraordinary experiences where people collaborate and connect to a world of information and innovation. Our products and services are delivered through integrated platforms that combine hardware, software, and services.
We sell into the business marketplace through an extensive network of DMRs and VARs. Our DMRs include companies such as CDW Corporation and Insight Corporation. VARs include our network of registered NETGEAR Solution Partners. DMRs and VARs may receive sales incentives, marketing support and other program benefits from us.
We sell into the business marketplace through an extensive network of DMRs and MSPs. Our DMRs include companies such as CDW Corporation and Insight Corporation, and our MSPs include members of our registered NETGEAR Solution Partner program.
Our highly differentiated connected solutions range from switching and wireless products to augment business networks and audio and video (“AV”) over Ethernet for Pro AV applications to our good, better, and best WiFi solutions, security and support services to protect and enhance business and home networks.
Our connected solutions range from switching and wireless products that support AV over Ethernet for Pro AV applications and business networks to WiFi networking solutions, security and support services for enterprise and home networks.
The competitive environment in which we operate changes 8 Table of Contents rapidly due to technological reasons and other factors outside of our control, such as new entrants to the market and the ability of market participants to adapt to changing environments.
The competitive environment in which we operate changes rapidly due to technological reasons and other factors outside of our control, such as new entrants to the market and the ability of market participants to adapt to changing environments. Other companies with significant resources could also become direct competitors, either through acquiring a competitor or through internal efforts.
Accordingly, we have made investments in our research and development department in order to effectively evaluate existing and new third-party technologies, develop existing and new in-house technologies, and develop and test new products and services.
Accordingly, we invest in research and development activities to evaluate and integrate third-party technologies, enhance existing and develop new in-house technologies, and design, develop and test new products and services.
In addition, these parties are also responsible for some configuration and re-packaging of our products including bundling components to form kits, inserting appropriate documentation, disk drive configuration, and adding power adapters. APL Logistics Americas, Ltd. in City of Industry, California serves the Americas region, Kerry Logistics Ltd. in Singapore serves the Asia Pacific region, DSV Solutions B.V.
In addition, these parties are also responsible for some configuration and re-packaging of our products including bundling components to form kits, inserting appropriate documentation, and adding power adapters.
The group works closely with our sales and research and development groups to align our product development roadmap to meet customer technology demands from a strategic perspective.
Our product marketing group focuses on product and service messaging, new product introductions, product lifecycle management, demand assessment, and competitive analysis. The group works closely with our sales, finance and research and development teams to align our product development roadmap to meet customer technology demands from a strategic perspective.
We tailor various elements of the software interface, product design, including component specification, physical characteristics such as casing, design and coloration, and specific user interface features to meet the needs of these markets. We also leverage many of our technological developments, high volume manufacturing, technical support and engineering infrastructure across our markets to maximize business efficiencies.
Our products and services are designed to meet the specific needs of the business, consumer, and service provider markets. We tailor various elements of the software interface, product design, including component specification, physical characteristics such as casing, design and coloration, and specific user interface features to meet the needs of these markets.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the Securities Exchange Commission (the “SEC”). Our website address is www.netgear.com .
We monitor our workplace to maintain a clean and safe environment, identify hazards, minimize injury and illness, promote industrial hygiene, provide ergonomic training and equipment, machine safeguarding and more. 13 Table of Contents Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the Securities Exchange Commission (the “SEC”).
The group also ensures that product and services development activities, product and services launches, and ongoing demand and supply planning for our products occur in a well-managed, timely manner in coordination with our development, manufacturing, and sales groups, as well as our ODM and sales channel partners.
The group also ensures that product and services development activities, product and services launches, and ongoing demand and supply planning for our products occur in a well-managed, timely manner in coordination with our development, manufacturing, and sales groups, as well as our ODM and sales channel partners. 10 Table of Contents We conduct most of our international sales and marketing operations through wholly owned subsidiaries, which operate via regional sales and marketing teams and branch offices worldwide, aligned to our Enterprise and Consumer structures.
These products and services are sold into the business marketplace through an extensive network of DMRs and VARs, NETGEAR.com, and through brick-and-mortar retail and e-commerce channels and include: Pro AV • Pro AV Solutions: devices that include high-performance, flexible Ethernet switches that are engineered for easy configuration of AV over IP for both commercial and high-end residential installations, and switches that allow connecting network equipment and WiFi access points to the network; and • NETGEAR Engage Controller: used to provide quick, profile-based configuration for audio and video over an IP network to integrate our products with those from a myriad of AV end point manufacturers for fast, easy deployments that help eliminate cost and complexity.
The products and services are sold into the business marketplace through an extensive network of DMRs and MSPs, NETGEAR.com, and through brick-and-mortar retail and e-commerce channels and include: AV • Pro AV Solutions: networking solutions that include Ethernet switches, routers, and WiFi access points designed to support AV over IP deployments for both commercial and high-end residential installations; and • NETGEAR Engage Controller: software that provides centralized, profile-based configuration and unified management of AV networking devices for audio and video over IP deployments, supporting auto-discovery, rapid setup, and interoperability with third-party AV end point manufactures.
In addition to healthcare benefits, we provide a variety of wellness resources and programs designed to help employees achieve good physical, financial, emotional, intellectual and social well-being. We monitor our workplace to maintain a clean and safe environment, identify hazards, minimize injury and illness, promote industrial hygiene, provide ergonomic training and equipment, machine safeguarding and more.
In addition to healthcare benefits, we provide a variety of wellness resources and programs designed to help employees achieve good physical, financial, emotional, intellectual and social well-being.
Service providers supply our products to their business and home subscribers. Our largest broadband service providers include AT&T and Telstra. Direct Online Store. We sell directly online at www.netgear.com in the United States and internationally to consumers and businesses.
Our largest broadband service providers include AT&T. Direct Online Store. We sell directly online at www.netgear.com in the United States and internationally to enterprises and consumers. Through our direct online store, we provide high-performance and premium networking and internet connected products and subscription services, some of which are only available at www.netgear.com .
Our permanent employees design our technical support model and process and are responsible for training and managing our vendors and their agents. They also handle escalations from the 10 Table of Contents outsourced agents. We utilize the information gained from customer interactions to enhance our product offerings, including further simplifying the installation process.
Customer support is provided through a combination of a limited number of permanent employees and use of outsourced agents. Our permanent employees design our technical support model and process and are responsible for training and managing our vendors and their agents. They also handle escalations from the outsourced agents.
To provide desirable products and services at attractive prices, we focus on the unique requirements of these markets, and exercise strong operational discipline. Sales Channels We sell our products through multiple sales channels worldwide, including wholesale distributors, traditional and online retailers, direct market resellers (“DMRs”), value-added resellers (“VARs”), broadband service providers and through our direct online store at www.netgear.com .
Sales Channels We sell our products through multiple sales channels worldwide, including wholesale distributors, traditional and online retailers, direct market resellers (“DMRs”), MSP, broadband service providers, and through our direct online store at www.netgear.com . Wholesale Distributors. Our distribution channel supplies our products to retailers, e-commerce resellers, DMRs, MSPs and broadband service providers.
Customers can also get self-help service through the comprehensive knowledge base, AI chatbot and user forums on our website, and apply AI to optimize support searches. Customer support is provided through a combination of a limited number of permanent employees and use of outsourced agents.
Customer Support We design our products with ease-of-use top of mind. We respond globally to customer inquiries through a variety of channels including phone, chat, community, social media, and email. Customers can also get self-help service through the comprehensive knowledge base, AI chatbot and user forums on our website, and apply AI to optimize support searches.
Markets Our mission is to unleash the full potential of connectivity with intelligent solutions that delight and help protect businesses, consumers and service providers.
Markets Our mission is to unleash the full potential of connectivity with intelligent solutions that delight and help protect businesses, consumers, and service providers. Demand for networking solutions continues to be driven by the need for reliable, high-speed connectivity, increasing device density, and growing requirements for security and manageability across a broad range of environments.
Through our direct online store, we provide high-performance and premium networking and internet connected products and subscription services, some of which are only available at www.netgear.com . The direct online store also allows us to deliver curated rich content to supplement the purchase journey of customers, in addition to establishing a direct relationship with our customers.
The direct online store also allows us to deliver curated rich content to supplement the purchase journey of customers, in addition to establishing a direct relationship with our customers. NETGEAR.com is a destination where we deliver to early tech adopters and inexperienced audiences alike a premium and comprehensive product and brand experience.
The Connected Home segment offers advanced connectivity, powerful performance, and enhanced security features right out of the box, designed to help keep families safe online, whether at home or on the go, including high-performance, dependable and easy-to-use premium WiFi networking solutions such as 4G/5G mobile products, WiFi 7 Tri-band and Quad-band mesh systems and routers, WiFi 6E, WiFi 6, and subscription services that provide consumers a range of value-added services focused on performance, security, privacy and premium support.
The Consumer segment focuses on consumers and provides high-performance, dependable and easy-to-use WiFi internet networking solutions such as multi-band WiFi 7 mesh systems and routers, subscription services offering performance, security, privacy and support, and 4G/5G mobile products, including WiFi 7 and WiFi 6/6E-enabled portable mobile hotspots and mobile routers, designed to address the demand for reliable, high-speed connectivity at home and on the go.
Our 7 Table of Contents connectivity product offerings for the business market include enhanced security features and remote configurability often required in a business setting. Our vision for the business network is to deliver differentiated, reliable, easy to use, high performance and/or customized solutions.
Our connectivity product offerings for the business market include enhanced security features and remote configurability often required in a business setting. Our vision for the Enterprise segment is to be a trusted partner for networking and security solutions that support the evolving needs of Pro AV and SME environments.
Under both ODM and In-House development, we develop portions of the software on some products, including embedded firmware or components of firmware, mobile applications, and cloud software. ODM. Under the ODM methodology, we define the product concept and specifications and recommend the technology selection.
We identify, qualify and advance new technologies to develop products through a combination of ODM and in-house development approaches. Under both ODM and in-house development, we develop portions of the software on certain products, including embedded firmware or components of firmware, mobile applications, and cloud software that support management and service experiences.
Netherlands serves the EMEA region, and Likewize Logistics Pty Ltd. in Sydney, Australia serves Australia and New Zealand. Sales and Marketing We work directly with our retail partners and value-added resellers (VARs) on market development activities, such as co-advertising, online promotions and video demonstrations, live and virtual event sponsorships and sales associate training.
We work directly with our retail partners and MSPs on market development activities, such as co-advertising, online promotions and video demonstrations, live and virtual event sponsorships and sales associate training. We also participate in major industry trade shows and marketing events alone and alongside many of our AV and Broadcast manufacturing partners.
Item 1. B usiness General We are a global leader in innovative and advanced networking technologies for businesses, homes, and service providers. We deliver a wide range of intelligent solutions designed to unleash the full potential of connectivity. Through 2024, we operated and reported in two segments: NETGEAR for Business and Connected Home.
Item 1. B usiness General 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 research and development employees work closely with our technology and manufacturing partners to bring high quality new products and services to market in a timely and cost-efficient manner. We identify, qualify and create new technologies to develop products using one or both of the methodologies described below.
Our research and development employees work closely with our technology and manufacturing partners to bring high quality new products and services to market in a timely and 8 Table of Contents cost-efficient manner. Research and development efforts increasingly focus on software, security, and capabilities that support subscription-based services and margin improvement.
Governmental Regulations Environmental Laws Our products and manufacturing process are subject to numerous governmental regulations, which cover both the use of various materials as well as environmental concerns.
In recent years, this seasonal pattern has been less pronounced, reflecting a shift in our business mix toward enterprise-oriented products and services, which are subject to different purchasing cycles than the consumer market. 11 Table of Contents Governmental Regulations Environmental Laws Our products and manufacturing process are subject to numerous governmental regulations, which cover both the use of various materials as well as environmental concerns.
We conduct business across three geographic territories: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”).
We conduct business across three geographic territories: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). In the years ended December 31, 2025, 2024, and 2023, we generated net revenue of $699.6 million, $673.8 million, and $740.8 million, respectively.
Research and Development Our success depends on our ability to develop products that meet changing user needs and to anticipate and proactively respond to evolving technology in a timely and cost-effective manner.
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. Research and Development Our success depends on our ability to develop products that address evolving customer needs and changes in technology in a timely and cost-effective manner.
Additionally, we continually invest in research and development to create new technologies and services and to capitalize on technological inflection points and trends, such as audio and video over Ethernet, multi-Gigabit internet service to homes, WiFi 7, eSIM and future technologies.
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.
Competition The business, consumer, and service provider markets are intensely competitive and subject to rapid technological change. We expect competition to continue to intensify.
The Consumer business focuses on growth opportunities across home networking, mobile connectivity, smart home–related capabilities, and cybersecurity, supported by subscription-based services and software that enhance performance, security, privacy, and customer experience. Competition The enterprise, consumer, and service provider markets are intensely competitive and subject to rapid technological change. We expect competition to continue to intensify.
Total Network Solution • Pro Routers: devices that provide the internet gateway for businesses and combine with access points, Ethernet switches, and our Insight cloud management software to create a Total Network Solution for businesses; • Enterprise-grade, Cloud managed or standalone Pro WiFi access points: used to provide wide coverage areas and fast WiFi for businesses of varying sizes, and to provide secure WiFi connections to various devices; and • NETGEAR Insight remote management software: helps VARs and small businesses remotely deploy, monitor, manage and secure their networks easily and seamlessly.
Enterprise • Pro Routers: devices that provide the internet gateway for businesses and combine with access points, Ethernet switches, and our Insight cloud management software to create a complete suite for small and medium enterprises; • Wireless Networking: enterprise-grade, cloud-managed or standalone WiFi access points that provide wide coverage areas, fast wireless connectivity, and secure WiFi access for businesses of varying sizes; • NETGEAR Insight Remote Management: cloud-based platform that enables remote deployment, monitoring, management, and troubleshooting of WiFi, switching, routing, cellular, and security solutions, and provides MSP-centric capabilities, such as workflow application programming interfaces (“APIs”) and flexible licensing; and • NETGEAR Exium Security Solutions: security software that provides on-premises next-generation firewall and cloud-based SASE capabilities and includes a centralized, cloud-based management portal integrated with MSP tools for small and medium enterprises and MSPs.
To remain competitive, we believe we must continue to aggressively invest resources in highly differentiated, “good, better, best”, high performance reliable and trusted connectivity solutions, complemented by valuable subscription services, expanding our sales channels including our direct-to-consumer capabilities and custom installers, increasing engagement with our customers and manufacturing partners, and maintaining customer satisfaction worldwide.
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 product line helps to create and extend wired and wireless networks as well as devices that attach to the network, such as services that complement and enhance our product line offerings. These products are available in multiple configurations to address the changing needs of our customers in each geographic region. NETGEAR for Business.
These products are available in multiple configurations to address the changing needs of our customers across geographic regions. Enterprise.
Our vision for the home network is to build a NETGEAR mobile product range with “good, better, best” devices to improve the user experience, as well as to deliver a seamless and integrated experience that is built off our foundation of best-in-class in-home connectivity, thus creating a Smart Environment.
We aim to deliver a seamless and integrated connectivity experience through a range of “good, better, best” networking and mobile products, building on our foundation of in-home connectivity and extending to mobile and on-the-go use cases as demands on home and personal networks continue to increase.
Removed
The NETGEAR for Business segment offers reliable, easy-to-use, high-performance networking solutions, including switches, routers, access points, software, and AV over IP technologies, tailored to meet the diverse needs of organizations of all sizes.
Added
Our purpose is to power extraordinary experiences, and our mission is to unleash the full potential of connectivity with intelligent solutions that delight and protect. As part of the ongoing development of our business, 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.
Removed
As we announced in February 2025, beginning with the first quarter of 2025, the Connected Home segment will be separated into two segments, consisting of Mobile and Home Networking, in order to further strengthen operational and financial management and enable further focus on growth opportunities while maintaining financial discipline.
Added
The first phase of this transformation, which began in 2024, has been completed and focused on establishing foundational capabilities, including organizational alignment, capital allocation priorities, and operational processes. The second phase, which we are now entering, is focused on strengthening our core businesses through improved execution across product development, go-to-market activities, and cost structure.
Removed
Following this separation, the Company will operate and report in three segments: NETGEAR for Business, Mobile and Home Networking. In the years ended December 31, 2024, 2023, and 2022, we generated net revenue of $673.8 million, $740.8 million, and $932.5 million, respectively.
Added
Subject to market conditions and business performance, a subsequent phase is expected to focus on accelerating growth initiatives, including selective inorganic opportunities. In the first quarter of 2025, we realigned our business structure by separating the previously disclosed Connected Home segment into two reportable segments: Home Networking and Mobile.
Removed
Factors driving the demand for high-performance products within these markets include the growing need for always on, high speed internet connectivity anywhere and with exceptional security features, the availability of faster internet speeds and new WiFi standards such as WiFi 7 and the growth of bandwidth-hungry applications such as 8K video streaming and gaming, real time streaming of entertainment and cultural events, collaborative platforms that support the transfer of very large data sets and immersive experiences as well as artificial intelligence (“AI”), augmented reality (“AR”) and virtual reality (“VR”) applications.
Added
Effective January 1, 2025, we operated and reported in three segments for the first three fiscal quarters of 2025: NETGEAR for Business, Home Networking, and Mobile.
Removed
With the availability of increasingly fast and ubiquitous internet, the proliferation of IoT devices and the rise of generative AI, also comes a steep increase in malware, data theft, intrusion and other cyber threats necessitating comprehensive yet simple to use solutions. Founded and based in the USA since 1996, NETGEAR has had a longstanding commitment to security and privacy.
Added
Beginning on the first day of the fourth fiscal quarter of 2025, we streamlined our operating and reporting structure and returned to two reportable segments: Enterprise (formerly NETGEAR for Business) and Consumer (formerly Connected Home), with Consumer comprising the former Home Networking and Mobile businesses.
Removed
Rigorous security protections are built into our hardware and software, and we make further protections available to consumers via our Armor service, all of which are backed by our ongoing mission to respect and bolster the protection of customer privacy and personal information.
Added
These realignments align our financial reporting more closely with our then and go-forward business strategy and customer focus. Refer to the Note 12, Segment Information, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for additional information.
Removed
As employees continue to return to the office in various ways, the need for reliable networking, both IT and AV, put pressure on businesses to enhance network availability and create equal and engaging experiences for customers and employees whether they are onsite or not.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOther factors that could affect our quarterly and annual operating results include those listed in the risk factors section of this report and others such as: • operational disruptions, such as transportation delays or failure of our order processing system, particularly if they occur at the end of a fiscal quarter; • component supply constraints, including specialized WiFi 7 or WiFi 6 chipsets, or sudden, unforeseen price increases from our manufacturers, suppliers and vendors; • unanticipated increases in costs, including air and ocean freight, associated with shipping and delivery of our products; • the inability to maintain stable operations by our suppliers, distribution centers and other parties with which we have commercial relationships; • seasonal shifts in end market demand for our products, particularly in our Connected Home business segment; • our inability to accurately forecast product demand or optimal product mix such as the proportion of lower-priced products versus premium products resulting in increased inventory exposure and/or lost sales; • unfavorable or compressed level of inventory and turns; • changes in or consolidation of our sales channels and wholesale distributor relationships or failure to manage our sales channel inventory and warehousing requirements; • unanticipated decreases, reduced inventory targets or delays in purchases of our products by our significant traditional and online retail customers; • shift in overall product mix sales from higher to lower gross margin products, from lower-priced products to premium products, or from one business segment to another, that would adversely impact our revenue and gross margins; • an increase in price protection claims, redemptions of marketing rebates, product warranty and stock rotation returns or allowance for doubtful accounts; • delay or failure to fulfill orders for our products on a timely basis; • changes in the pricing policies of or the introduction of new products by us or our competitors; • unexpected challenges or delays in our ability to further develop services and applications that complement our products and result in meaningful subscriber growth and future recurring revenue; • discovery or exploitation of security vulnerabilities in our products, services or systems, leading to negative publicity, decreased demand or potential liability, including potential breach of our customers’ data privacy or disruption of the continuous operation of our cloud infrastructure and our products; • introductions of new technologies and changes in consumer preferences that result in either unanticipated or unexpectedly rapid product category shifts; • slow or negative growth in the networking product, personal computer, Internet infrastructure, smart home, home electronics and related technology markets; • delays in the introduction of new products by us or market acceptance of these products; • delays in regulatory approvals or consumer adoption of WiFi 7 or WiFi 6E technology in various regions; 25 Table of Contents • increases in expenses related to the development, introduction and marketing of new products that adversely impact our margins; • increases in expenses related to the development and marketing related to the Company’s direct online sales channels that adversely impact our margins; • changes in tax rates or adverse changes in tax laws that expose us to additional income tax liabilities; • changes in U.S. and international trade policy that adversely affect customs, tax or duty rates; • foreign currency exchange rate fluctuations in the jurisdictions where we transact sales and expenditures in local currency; • unanticipated increases in expenses related to periodic restructuring measures undertaken to achieve profitability and other business goals, including the reallocation or relocation of resources; • delay or failure of our service provider customers to purchase at their historic volumes or at the volumes that they or we forecast; • litigation involving alleged patent infringement, consumer class actions, securities class actions or other claims that could negatively impact our reputation, brand, business and financial condition; • disruptions or delays related to our financial and enterprise resource planning systems; • allowance for doubtful accounts exposure with our existing retailers, distributors and other channel partners and new retailers, distributors and other channel partners, particularly as we expand into new international markets; • geopolitical disruption, including sudden changes in immigration policies and economic sanctions, leading to disruption in our workforce or delay or even stoppage of our operations in manufacturing, transportation, technical support and research and development; • terms of our contracts with customers or suppliers that cause us to incur additional expenses or assume additional liabilities; • epidemic or widespread product and/or component failure, performance problems or unanticipated safety issues in one or more of our products that could negatively impact our reputation, brand and business; • any changes in accounting rules; • challenges associated with integrating acquisitions that we make, or with realizing value from our strategic investments in other companies; • failure to effectively manage our third-party customer support partners, which may result in customer complaints and/or harm to our brand; • our inability to monitor and ensure compliance with our code of ethics, our anti-corruption compliance program and domestic and international anti-corruption laws and regulations, whether in relation to our employees or with our suppliers or customers; • labor unrest at facilities managed by our third-party manufacturers; • workplace or human rights violations in certain countries in which our third-party manufacturers or suppliers operate, which may require quarantine of affected products, affect our brand and negatively affect our products’ acceptance by consumers; • overall performance of the equity markets and the economy as a whole; • unanticipated shifts or declines in profit by geographical region that would adversely impact our tax rate; and • our failure to implement and maintain the appropriate internal controls over financial reporting which may result in restatements of our financial statements. 26 Table of Contents As a result, period-to-period comparisons of our operating results may not be meaningful, and you should not rely on them as an indication of our future performance.
Biggest changeOther factors that could affect our quarterly and annual operating results include those listed in the risk factors section of this report and others such as: • operational disruptions, such as transportation delays or failure of our order processing system, particularly if they occur at the end of a fiscal quarter; • component supply constraints, including specialized WiFi 7 or WiFi 6 chipsets, or sudden, unforeseen price increases from our manufacturers, suppliers and vendors; • unanticipated increases in costs, including air and ocean freight, associated with shipping and delivery of our products; • the inability to maintain stable operations by our suppliers, distribution centers and other parties with which we have commercial relationships; • seasonal shifts in end market demand for our products, particularly in our Consumer segment; • our inability to accurately forecast product demand or optimal product mix such as the proportion of lower-priced products versus premium products resulting in increased inventory exposure and/or lost sales; • unfavorable or compressed level of inventory and turns; • changes in or consolidation of our sales channels and wholesale distributor relationships or failure to manage our sales channel inventory and warehousing requirements; • unanticipated decreases, reduced inventory targets or delays in purchases of our products by our significant traditional and online retail customers; • shift in overall product mix sales from higher to lower gross margin products, from lower-priced products to premium products, or from one business segment to another, that would adversely impact our revenue and gross margins; • an increase in price protection claims, redemptions of marketing rebates, product warranty and stock rotation returns or allowance for doubtful accounts; • delay or failure to fulfill orders for our products on a timely basis; • changes in the pricing policies of or the introduction of new products by us or our competitors; 26 Table of Contents • unexpected challenges or delays in our ability to further develop services and applications that complement our products and result in meaningful subscriber growth and future recurring revenue; • discovery or exploitation of security vulnerabilities in our products, services or systems, leading to negative publicity, decreased demand or potential liability, including potential breach of our customers’ data privacy or disruption of the continuous operation of our cloud infrastructure and our products; • introductions of new technologies and changes in consumer preferences that result in either unanticipated or unexpectedly rapid product category shifts; • slow or negative growth in the networking product, personal computer, Internet infrastructure, smart home, home electronics and related technology markets; • delays in the introduction of new products by us or market acceptance of these products; • delays in regulatory approvals or consumer adoption of WiFi 7 or WiFi 6E technology in various regions; • increases in expenses related to the development, introduction and marketing of new products that adversely impact our margins; • increases in expenses related to the development and marketing related to the Company’s direct online sales channels that adversely impact our margins; • changes in tax rates or adverse changes in tax laws that expose us to additional income tax liabilities; • changes in U.S. and international trade policy and/or regulations that adversely affect our operations or supply chain, customs, tax or duty rates as well as tariffs, the threat of new or increased tariffs, and escalating trade tensions; • foreign currency exchange rate fluctuations in the jurisdictions where we transact sales and expenditures in local currency; • unanticipated increases in expenses related to periodic restructuring measures undertaken to achieve profitability and other business goals, including the reallocation or relocation of resources; • delay or failure of our service provider customers to purchase at their historic volumes or at the volumes that they or we forecast; • litigation involving alleged patent infringement, consumer class actions, securities class actions or other claims that could negatively impact our reputation, brand, business and financial condition; • disruptions or delays related to our financial and enterprise resource planning systems; • allowance for doubtful accounts exposure with our existing retailers, distributors and other channel partners and new retailers, distributors and other channel partners, particularly as we expand into new international markets; • geopolitical disruption, including sudden changes in immigration policies and economic sanctions, leading to disruption in our workforce or delay or even stoppage of our operations in manufacturing, transportation, technical support and research and development; • terms of our contracts with customers or suppliers that cause us to incur additional expenses or assume additional liabilities; • epidemic or widespread product and/or component failure, performance problems or unanticipated safety issues in one or more of our products that could negatively impact our reputation, brand and business; • any changes in accounting rules; • challenges associated with integrating acquisitions that we make, or with realizing value from our strategic investments in other companies; • failure to effectively manage our third-party customer support partners, which may result in customer complaints and/or harm to our brand; 27 Table of Contents • our inability to monitor and ensure compliance with our code of ethics, our anti-corruption compliance program and domestic and international anti-corruption laws and regulations, whether in relation to our employees or with our suppliers or customers; • labor unrest at facilities managed by our third-party manufacturers; • workplace or human rights violations in certain countries in which our third-party manufacturers or suppliers operate, which may require quarantine of affected products, affect our brand and negatively affect our products’ acceptance by consumers; • overall performance of the equity markets and the economy as a whole; • unanticipated shifts or declines in profit by geographical region that would adversely impact our tax rate; and • our failure to implement and maintain the appropriate internal controls over financial reporting which may result in restatements of our financial statements.
In addition, if worldwide demand for the components increases significantly, the availability of these components could be limited and prices for such components may increase. For example, as the demand for Artificial Intelligence chips increase, semiconductor production capacity may be shifted to these specific components thereby constraining supply of or increasing cost on chips used in our products.
In addition, if worldwide demand for the components increases significantly, the availability of these components could be limited and prices for such components may increase. For example, as the demand for Artificial Intelligence chips increases, semiconductor production capacity may be shifted to these specific components thereby constraining supply of or increasing cost on chips used in our products.
Actual and potential breaches of our security measures as well as the loss, disclosure or dissemination of proprietary information or sensitive or confidential data about us, our personnel or our customers, including the potential loss or disclosure of such information or data as a result of improper use of AI tools, personnel error or other personnel actions, hacking, fraud, social engineering or other forms of deception, could expose us, our customers or the individuals affected to a risk of loss or misuse of this information, result in litigation and potential liability for us, subject us to significant governmental fines and penalties (as well as other enforcement and remediation actions), damage our brand and reputation, or otherwise harm our business.
Actual and potential breaches of our security measures as well as the loss, disclosure, dissemination or other compromise of proprietary information or sensitive or confidential data about us, our personnel or our customers, including the potential loss or disclosure of such information or data as a result of improper use of AI tools, personnel error or other personnel actions, hacking, fraud, social engineering or other forms of deception, could expose us, our customers or the individuals affected to a risk of loss or misuse of this information, result in litigation and potential liability for us, subject us to significant governmental fines and penalties (as well as other enforcement and remediation actions), damage our brand and reputation, or otherwise harm our business.
Acquisitions involve numerous risks and challenges, including but not limited to the following: • integrating the companies, assets, systems, products, sales channels and personnel that we acquire; • higher than anticipated acquisition and integration costs and expenses; • reliance on third parties to provide transition services for a period of time after closing to ensure an orderly transition of the business; 28 Table of Contents • growing or maintaining revenues to justify the purchase price and the increased expenses associated with acquisitions; • entering into territories or markets with which we have limited or no prior experience; • establishing or maintaining business relationships with customers, vendors and suppliers who may be new to us; • overcoming the employee, customer, vendor and supplier turnover that may occur as a result of the acquisition; • disruption of, and demands on, our ongoing business as a result of integration activities including diversion of management’s time and attention from running the day-to-day operations of our business; • inability to implement uniform standards, disclosure controls and procedures, internal controls over financial reporting and other procedures and policies in a timely manner; • inability to realize the anticipated benefits of or successfully integrate with our existing business the businesses, products, technologies or personnel that we acquire; and • potential post-closing disputes.
Acquisitions involve numerous risks and challenges, including but not limited to the following: • integrating the companies, assets, systems, products, sales channels and personnel that we acquire; • higher than anticipated acquisition and integration costs and expenses; • reliance on third parties to provide transition services for a period of time after closing to ensure an orderly transition of the business; • growing or maintaining revenues to justify the purchase price and the increased expenses associated with acquisitions; • entering into territories or markets with which we have limited or no prior experience; • establishing or maintaining business relationships with customers, vendors and suppliers who may be new to us; 29 Table of Contents • overcoming the employee, customer, vendor and supplier turnover that may occur as a result of the acquisition; • disruption of, and demands on, our ongoing business as a result of integration activities including diversion of management’s time and attention from running the day-to-day operations of our business; • inability to implement uniform standards, disclosure controls and procedures, internal controls over financial reporting and other procedures and policies in a timely manner; • inability to realize the anticipated benefits of or successfully integrate with our existing business the businesses, products, technologies or personnel that we acquire; and • potential post-closing disputes.
International trade disputes, geopolitical tensions, and military conflicts have led, and continue to lead, to new and increasing export restrictions, trade barriers, tariffs, and other trade measures that can increase our manufacturing and transportation costs, limit our ability to sell to certain customers or markets, limit our ability to procure, or increase our costs for, components or raw materials, impede or slow the movement of our goods across borders, or otherwise restrict our ability to conduct operations.
International trade disputes, geopolitical tensions, and military conflicts have led, and continue to lead, to new and increasing export restrictions, import restrictions, trade barriers, tariffs, and other trade measures that can increase our manufacturing and transportation costs, limit our ability to sell to certain customers or markets, limit our ability to procure, or increase our costs for, components or raw materials, impede or slow the movement of our goods across borders, or otherwise restrict our ability to conduct operations.
As a result, our business, operating results and financial condition could be materially adversely affected. Product security vulnerabilities, system security risks, data protection breaches, cyber-attacks, improper use of artificial intelligence (“AI”) tools, and other threats and risks, could disrupt or otherwise compromise our products, services, internal operations or information technology systems, or those of third parties with whom we work.
As a result, our business, operating results and financial condition could be materially adversely affected. Product security vulnerabilities, system security risks, data breaches, cyber-attacks, improper use of artificial intelligence (“AI”) tools, and other threats and risks, could disrupt or otherwise compromise our products, services, internal operations or information technology systems, or those of third parties with whom we work.
In addition, U.S. and foreign regulators have increased their focus on cybersecurity (including imposing specific security measures related to the products and services we sell) and data protection and many states, countries and jurisdictions have laws and regulations that may impose significant penalties and fines for failure to comply with these requirements.
In addition, U.S. and foreign regulators have increased their focus on cybersecurity (including imposing specific security measures related to the products and services we sell) and data protection and many states, countries and other jurisdictions have laws and regulations that may impose significant penalties and fines for failure to comply with these requirements.
In most cases, we rely on these manufacturers to procure components and, in some cases, subcontract engineering work. Some of our products are manufactured by a single manufacturer. We do not have any long-term contracts with any of our third-party manufacturers. Some of these third-party manufacturers produce products for our competitors or are themselves competitors in certain product categories.
In most cases, we rely on these manufacturers to procure approved components and, in some cases, subcontract engineering work. Some of our products are manufactured by a single manufacturer. We do not have any long-term contracts with any of our third-party manufacturers. Some of these third-party manufacturers produce products for our competitors or are themselves competitors in certain product categories.
For example, in the past, various third parties have initiated litigation against us in Europe, China and the United States that carried the threat of an injunction on the importation of our products into certain European territories, the United States and China, as well as a significant increase in time and resources to defend against.
For example, in the past, various third parties have initiated litigation against us in Europe, China and the United States that carried the threat of an injunction on the importation of our products into certain territories, as well as a significant increase in time and resources to defend against.
We cannot predict what further actions may be taken with respect to export regulations, tariffs or other trade regulations between the United States and other countries, what products or companies may be subject to such actions, or what actions may be taken by other countries in retaliation.
We cannot predict what further actions may be taken with respect to export regulations, import regulations, tariffs or other trade regulations between the United States and other countries, what products or companies may be subject to such actions, or what actions may be taken by other countries in retaliation.
We devote considerable internal and external resources to network security, data encryption and other security measures to protect our information systems and customer data, but our efforts cannot provide an absolute guarantee of security.
We devote considerable internal and external resources to network security, data encryption and other security measures to protect our information systems and data (including customer data), but our efforts cannot provide an absolute guarantee of security.
Our reliance on third-party manufacturers also exposes us to the following risks over which we have limited control: • unexpected increases in manufacturing and repair costs; • inability to control the quality and reliability of finished products; • inability to control delivery schedules; • potential liability for expenses incurred by third-party manufacturers in reliance on our forecasts that later prove to be inaccurate, including the cost of components purchased by third-party manufacturers on our behalf, which may be material; • potential lack of adequate capacity to manufacture all or a part of the products we require; and • potential labor unrest affecting the ability of the third-party manufacturers to produce our products.
Our reliance on third-party manufacturers also exposes us to the following risks over which we have limited control: • unexpected increases in manufacturing and repair costs; • inability to control the quality and reliability of finished products; • inability to control delivery schedules; • potential liability for expenses incurred by third-party manufacturers in reliance on our forecasts that later prove to be inaccurate, including the cost of components purchased by third-party manufacturers on our behalf, which may be material; • potential lack of adequate capacity to manufacture all or a part of the products we require; and 22 Table of Contents • potential labor unrest affecting the ability of the third-party manufacturers to produce our products.
In addition, availability of our products from third-party manufacturers and our ability to distribute our products into the United States and non-U.S. jurisdictions may be impacted by factors such as an increase in duties, tariffs or other restrictions on trade; raw material shortages or price increases, work stoppages, strikes and political unrest; uncertain economic conditions; economic crises and international disputes or conflicts; changes in leadership and the political climate in countries from which we import products; and failure of the United States to maintain normal trade relations with China and other countries.
In addition, availability of our products from third-party manufacturers and our ability to distribute our products into the United States and non-U.S. jurisdictions may be impacted by factors such as an increase in duties, tariffs or other restrictions on trade; raw material shortages or price increases, work stoppages, strikes and political unrest; uncertain economic conditions; economic crises and international disputes or conflicts; changes in leadership and the political climate in countries from which we import products; and failure of the United States to maintain normal trade relations with countries around the world.
We compete with established companies that have longer operating histories and longstanding relationships with VARs that we would find highly desirable as sales channel partners. In addition, our efforts to realign or consolidate our sales channels may cause temporary disruptions in our product sales and revenue, and these changes may not result in the expected longer-term benefits.
We compete with established companies that have longer operating histories and longstanding relationships with MSPs that we would find highly desirable as sales channel partners. In addition, our efforts to realign or consolidate our sales channels may cause temporary disruptions in our product sales and revenue, and these changes may not result in the expected longer-term benefits.
For example, when demand for our Connected Home products turns out to be lower than we previously forecasted, it results in our revenue for our Connected Home products to come in lower than expected, as our channel partners in the U.S. replenish inventory slower than they sell through to end users to right size their inventory carrying position based on the lower demand levels than previously expected.
For example, when demand for our products turns out to be lower than we previously forecasted, it results in our revenue for our products to come in lower than expected, as our channel partners in the U.S. replenish inventory slower than they sell through to end users to right size their inventory carrying position based on the lower demand levels than previously expected.
For example, threat actors (including those sponsored by nation states) have, in the past, attacked or otherwise sought to compromise our 32 Table of Contents products and other hardware nearing end of life and/or running on outdated firmware without the latest security updates.
For example, threat actors (including those sponsored by nation states) have, in the past, attacked or otherwise sought to compromise our 33 Table of Contents products and other hardware nearing end of life and/or running on outdated firmware without the latest security updates.
Factors that could materially affect our future effective tax rates include but are not limited to: • changes in tax laws or the regulatory environment; • changes in accounting and tax standards or practices; • changes in the composition of operating income by tax jurisdiction; and 37 Table of Contents • our operating results before taxes.
Factors that could materially affect our future effective tax rates include but are not limited to: • changes in tax laws or the regulatory environment; 39 Table of Contents • changes in accounting and tax standards or practices; • changes in the composition of operating income by tax jurisdiction; and • our operating results before taxes.
Any changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, handset manufacturers, browser developers, or mobile carriers, or in their terms of service or policies that degrade our products’ functionality, reduce or eliminate our ability to update or distribute our products or services, give preferential treatment to 35 Table of Contents competitive products, or charge fees related to the distribution of our products could adversely affect the usage of our subscription services products or our other products and services on mobile devices.
Any changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, handset manufacturers, browser developers, or mobile carriers, or in their terms of service or policies that degrade our products’ functionality, reduce or eliminate our ability to update or distribute our products or services, give preferential treatment to competitive products, or charge fees related to the distribution of our products could adversely affect the usage of our subscription services products or our other products and services on mobile devices.
The recent trend in the consolidation of online retailers and DMR channels has resulted in intensified competition for preferred product placement, such as product placement on an online retailer’s Internet home page. Expanding our presence in the VAR channel may be difficult and expensive.
The recent trend in the consolidation of online retailers and DMR channels has resulted in intensified competition for preferred product placement, such as product placement on an online retailer’s Internet home page. Expanding our presence in the MSP channel may be difficult and expensive.
In the service provider space, we also face significant and increased competition from original design manufacturers, or ODMs, and contract manufacturers who sell and attempt to sell their products directly to service providers around the world. Many of our existing and potential competitors have longer operating histories, greater name recognition and substantially greater financial, technical, sales, marketing and other resources.
In the service provider space, we also face significant and increased competition from original design manufacturers, or ODMs, and contract manufacturers who sell and attempt to sell their products directly to service providers around the world. 20 Table of Contents Many of our existing and potential competitors have longer operating histories, greater name recognition and substantially greater financial, technical, sales, marketing and other resources.
Substantially all of our critical enterprise-wide information technology systems, including our main servers, are currently housed in colocation facilities in Arizona and different geographic regions in the United States. The majority of our manufacturing occurs in Southeast Asia and mainland China.
Substantially all of our critical enterprise-wide information technology systems, including our main servers, are currently housed in colocation facilities in Arizona and different geographic regions in the United States. The majority of our manufacturing occurs in Southeast Asia.
Some of our components have long lead times, such as WiFi chipsets, switching fabric chips, physical layer transceivers, and logic, power, analog and RF chipsets. If our forecasts are not timely provided or are less than our actual requirements, our third-party manufacturers may be unable to manufacture products in a timely manner.
Some of our components have long lead times, such as WiFi chipsets, switching fabric 15 Table of Contents chips, physical layer transceivers, and logic, power, analog and RF chipsets. If our forecasts are not timely provided or are less than our actual requirements, our third-party manufacturers may be unable to manufacture products in a timely manner.
Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, legal and regulatory challenges, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. Changes in business 16 Table of Contents strategies are inherently risky and may not be successful.
Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, legal and regulatory challenges, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. Changes in business strategies are inherently risky and may not be successful.
This requires material investment in capital, time and resources and carries the risk that it may not achieve the expected return on investment that we are expecting, and that it may adversely affect our relationships with our existing channel partners, which ultimately may materially and adversely affect our results of operations. 20 Table of Contents We also sell products to broadband service providers.
This requires material investment in capital, time and resources and carries the risk that it may not achieve the expected return on investment that we are expecting, and that it may adversely affect our relationships with our existing channel partners, which ultimately may materially and adversely affect our results of operations. We also sell products to broadband service providers.
We utilize a number of different distribution channels to deliver our products to the end consumer, and regularly enter agreements with resellers of our products at various levels in the distribution chain that could be subject to scrutiny under these laws in the event of private litigation or an investigation by a governmental competition authority.
We utilize a number of different distribution channels to deliver our products to the end consumer, and regularly enter agreements with resellers of our products at various levels in the distribution chain that could be subject to scrutiny under these 41 Table of Contents laws in the event of private litigation or an investigation by a governmental competition authority.
If we are unable to manage the cost of older products or successfully introduce new products with higher gross margins, our net revenue and overall gross margin would likely decline. If we fail to overcome the challenges associated with managing our broadband service provider sales channel, our net revenue and gross profit will be negatively impacted.
If we are unable 24 Table of Contents to manage the cost of older products or successfully introduce new products with higher gross margins, our net revenue and overall gross margin would likely decline. If we fail to overcome the challenges associated with managing our broadband service provider sales channel, our net revenue and gross profit will be negatively impacted.
Any delay in the development, production or 34 Table of Contents marketing of a new software solution could result in us not being among the first to market, which could further harm our competitive position. In addition, our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues and defects.
Any delay in the development, production or marketing of a new software solution could result in us not being among the first to market, which could further harm our competitive position. In addition, our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues and defects.
While we 41 Table of Contents believe that we have mitigated some of the business execution and business continuity risk with our organization into two business segments with separate leadership teams, the loss of any key personnel would still be disruptive and harm our business, especially given that our business is leanly staffed and relies on the expertise and high performance of our key personnel.
While we believe that we have mitigated some of the business execution and business continuity risk with our organization into two business segments with separate leadership teams, the loss of any key personnel would still be disruptive and harm our business, especially given that our business is leanly staffed and relies on the expertise and high performance of our key personnel.
As of the period ended October 1, 2023, we determined that it was no longer more likely than not that we would have sufficient profitability to realize the U.S. federal and state deferred tax assets. Accordingly, we recorded a full valuation allowance to impair U.S. federal and state deferred tax assets.
As of the period ended October 1, 2023, we determined that it was no longer more likely than not that we would have sufficient profitability to realize the U.S. federal and state deferred tax assets. Accordingly, we recorded a full valuation allowance to impair U.S. 40 Table of Contents federal and state deferred tax assets.
Our ability to maintain strong relationships with our principal customers is essential to our future performance. If any of our major customers reduce their level of purchases or refuse to pay the prices that we set for our products, our net revenue and operating results could be harmed.
Our ability to maintain strong 19 Table of Contents relationships with our principal customers is essential to our future performance. If any of our major customers reduce their level of purchases or refuse to pay the prices that we set for our products, our net revenue and operating results could be harmed.
Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our products and services or our end-users’ ability to utilize our solutions in their countries.
Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our 42 Table of Contents ability to distribute our products and services or our end-users’ ability to utilize our solutions in their countries.
In some instances, our competitors may be acquired by larger companies with additional formidable resources, such as the purchase of ARRIS by CommScope, Eero by Amazon and Linksys by Foxconn.
In some instances, our competitors may be acquired by larger companies with additional formidable resources, such as the purchase of ARRIS by CommScope and Eero by Amazon.
We are also required to comply with local environmental legislation and our customers rely on this compliance in order to sell our products. If our customers do not agree with 22 Table of Contents our interpretations and requirements of new legislation, they may cease to order our products and our revenue would be harmed.
We are also required to comply with local environmental legislation and our customers rely on this compliance in order to sell our products. If our customers do not agree with our interpretations and requirements of new legislation, they may cease to order our products and our revenue would be harmed.
Additionally, where an AI model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AI models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
Additionally, where an AI model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AI models may create flawed, incomplete, or 35 Table of Contents inaccurate outputs, some of which may appear correct.
Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes.
Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangible assets. Tax authorities could disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes.
For example, we manufacture and sell products which contain electronic components, and such components may contain materials that are subject 38 Table of Contents to government regulation in both the locations that we manufacture and assemble our products, as well as the locations where we sell our products. Certain regulations also limit the use of lead in electronic components.
For example, we manufacture and sell products which contain electronic components, and such components may contain materials that are subject to government regulation in both the locations that we manufacture and assemble our products, as well as the locations where we sell our products. Certain regulations also limit the use of lead in electronic components.
In addition, we may not have the resources 39 Table of Contents to maintain compliance with these customer requirements and failure to comply may result in decreased sales to these customers, which may have a material adverse effect on our business, financial condition and results of operations.
In addition, we may not have the resources to maintain compliance with these customer requirements and failure to comply may result in decreased sales to these customers, which may have a material adverse effect on our business, financial condition and results of operations.
International operations are subject to a number of other risks, including: • exchange rate fluctuations and inflation; • geopolitical and economic tensions, such as in the Middle East, between China/Taiwan, and international terrorism and anti-American sentiment, particularly in emerging markets; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws (including potential responses to the higher U.S. tariffs on certain imported products implemented by the U.S.); • increased difficulty in managing inventory and reduced inventory level targets; • delayed revenue recognition; • unpredictable judicial systems, which may unfairly favor domestic plaintiffs over foreign corporations, or which may more easily impose harsher penalties such as import injunctions; • less effective protection of intellectual property; • stringent consumer protection and product compliance regulations, including but not limited to the Restriction of Hazardous Substances directive, the Waste Electrical and Electronic Equipment directive and the European Ecodesign directive, or EuP, that are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; and • business difficulties, including potential bankruptcy or liquidation, of any of our worldwide third-party logistics providers.
International operations are subject to a number of other risks, including: • exchange rate fluctuations and inflation; • tariffs, the threat of new or increased tariffs, and escalating trade tensions; • geopolitical and economic tensions and international terrorism and anti-American sentiment, particularly in emerging markets; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws (including potential responses to the higher U.S. tariffs on certain imported products implemented by the U.S.); • increased difficulty in managing inventory and reduced inventory level targets; • delayed revenue recognition; • unpredictable judicial systems, which may unfairly favor domestic plaintiffs over foreign corporations, or which may more easily impose harsher penalties such as import injunctions; 23 Table of Contents • less effective protection of intellectual property; • stringent consumer protection and product compliance regulations, including but not limited to the Restriction of Hazardous Substances directive, the Waste Electrical and Electronic Equipment directive and the European Ecodesign directive, or EuP, that are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; and • business difficulties, including potential bankruptcy or liquidation, of any of our worldwide third-party logistics providers.
In addition, if we are unable to successfully introduce or acquire new products with higher gross margins, or enhance and improve our services and subscription offerings for customer retention or service revenue growth, or if we are unable to improve the margins on our previously introduced and rapidly growing product and services lines, our net revenue and overall gross margin would likely decline.
In addition, if we are unable to successfully introduce or acquire new products with higher gross margins, or enhance and improve our services and subscription offerings for customer retention or service revenue growth, or if 17 Table of Contents we are unable to improve the margins on our previously introduced and rapidly growing product and services lines, our net revenue and overall gross margin would likely decline.
Compliance with laws, regulations, industry standards, contracts, policies and other obligations concerning artificial intelligence, privacy, cybersecurity, data governance and data protection is a rigorous and time-intensive process, that continuously evolves and develops, and we may be required to put in place additional mechanisms ensuring compliance with such obligations and incur substantial expenditures.
Compliance with laws, regulations, industry standards, contracts, policies and other obligations concerning artificial intelligence, privacy, cybersecurity, data governance and data protection is a rigorous and time-intensive process, that continuously evolves and develops, and we have in the past and may in the future be required to put in place additional mechanisms ensuring compliance with such obligations and incur substantial expenditures.
We have embarked on an AI transformation effort to take full advantage of automation, artificial intelligence, machine learning and other technologies to drive efficiencies and improve productivity within our Company and to 33 Table of Contents develop and improve our products, services and customer experiences.
We have embarked on an AI transformation effort to take full advantage of automation, artificial intelligence, machine learning and other technologies to drive efficiencies and improve productivity within our Company and to develop and improve our products, services and customer experiences.
Our international freight is regularly subjected to inspection by governmental entities. If our delivery times increase unexpectedly for these or any other reasons, our ability to deliver products on time would be materially adversely affected and would result in delayed or lost revenue as well as customer-imposed penalties.
Our international freight is regularly subjected to inspection by governmental entities. If our delivery times increase unexpectedly for these or any other reasons, our ability to deliver products on time would be materially 28 Table of Contents adversely affected and would result in delayed or lost revenue as well as customer-imposed penalties.
Our sales and operations in international markets have exposed us to and may in the future expose us to operational, financial and regulatory risks. International sales comprise a significant amount of our overall net revenue. International sales were approximately 34% of overall net revenue in fiscal 2024 and fiscal 2023.
Our sales and operations in international markets have exposed us to and may in the future expose us to operational, financial and regulatory risks. International sales comprise a significant amount of our overall net revenue. International sales were approximately 34% of overall net revenue in fiscal 2025 and fiscal 2024, respectively.
A failure to predict low demand for a product could result in excess inventory, further reductions in target inventory levels, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories. Our traditional retail customers have faced increased and significant competition from online retailers.
A failure to predict low demand for a product could result in excess inventory, further reductions in target inventory levels, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories. 21 Table of Contents Our traditional retail customers have faced increased and significant competition from online retailers.
Consumer class-action lawsuits related to the marketing and performance of our home networking products have been asserted and may in the future be asserted against us. Finally, we have been sued in securities class action lawsuits, and may in the future 36 Table of Contents be named in other similar lawsuits.
Consumer class-action lawsuits related to the marketing and performance of our home networking products have been asserted and may in the future be asserted against us. Finally, we have been sued in securities class action lawsuits, and may in the future be named in other similar lawsuits.
Such report must contain among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as 43 Table of Contents to whether or not our internal control over financial reporting is effective.
Such report must contain among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective.
Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. For example, in 2022, the market price of our common stock and market capitalization declined and the U.S. WiFi market contracted, which had a significant negative impact on our Connected Home business.
Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. For example, in 2022, the market price of our common stock and market capitalization declined and the U.S. WiFi market contracted, which had a significant negative impact on our then-Consumer business.
We invest in companies primarily for strategic reasons but may not realize a return on our investments. We have made, and continue to seek to make, investments in companies around the world to further our strategic objectives and support our key business initiatives.
We invest in companies primarily for strategic reasons but may not realize a return on our investments. We have made investments in companies around the world to further our strategic objectives and support our key business initiatives.
If we do not successfully overcome these challenges, we will not be able to profitably manage our service provider sales channel and our financial results will be harmed. 24 Table of Contents We expect our operating results to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline.
If we do not successfully overcome these challenges, we will not be able to profitably manage our service provider sales channel and our financial results will be harmed. We expect our operating results to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline.
As a result, we recognized a goodwill impairment charge in the first quarter of 2022. We have not recognized any impairment charge on our NETGEAR for Business reporting unit. However, we operate in highly competitive environments and projections of future operating results and cash flows may vary significantly from actual results.
As a result, we recognized a goodwill impairment charge in the first quarter of 2022. We have not recognized any impairment charge on our Enterprise reporting unit. However, we operate in highly competitive environments and projections of future operating results and cash flows may vary significantly from actual results.
Any of these occurrences could materially adversely affect our business, operating results and financial condition. Furthermore, uncertainty about, or worsening of economic conditions could adversely affect consumer sentiment and demand for our products and services.
Any of these occurrences could materially adversely affect our business, operating results and financial condition. 44 Table of Contents Furthermore, uncertainty about, or worsening of economic conditions could adversely affect consumer sentiment and demand for our products and services.
Among other products and services, we offer comprehensive online cloud management services paired with a number of our products. Our products and services 30 Table of Contents could be compromised due to a variety of evolving threats and security vulnerabilities.
Among other products and services, we offer comprehensive online cloud management services paired with a number of our products. Our products and services could be compromised due to a variety of evolving threats and security vulnerabilities.
For additional information regarding certain of the lawsuits in which we are involved, see the information set forth in Note 8, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For additional information regarding certain of the lawsuits in which we are involved, see the information set forth in Note [9], Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this 38 Table of Contents Annual Report on Form 10-K.
The Tax Cuts and Jobs Act of 2017 included provisions effective for the 2022 tax year that eliminate the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to amortize such expenditures over five years for domestic payments and 15 years for payments to foreign parties.
The Tax Cuts and Jobs Act of 2017 included provisions effective for the 2022 tax year that eliminate the option to deduct research and development (R&D) expenditures immediately in the year incurred and required taxpayers to amortize such expenditures over five years for domestic payments and 15 years for payments to foreign parties.
We devote considerable time and resources to uncovering and remedying these threats and vulnerabilities, using both internal and external resources, but the threats to network and data security are increasingly diverse and sophisticated and we continue to implement additional protections and increase our monitoring and threat intelligence.
We devote considerable time 31 Table of Contents and resources to uncovering and remedying these threats and vulnerabilities, using both internal and external resources, but the threats to network and data security are increasingly diverse and sophisticated and we continue to implement additional protections and increase our monitoring and threat intelligence.
In the event that it is more difficult for our users to access and use our subscription services products or our other products on their mobile devices, or if our users choose not to access or use our subscription services products or our other products on their mobile devices, our user growth and user engagement and our business could be harmed.
In the event that it is more difficult for our users to access and use our subscription services products or our other products on their 37 Table of Contents mobile devices, or if our users choose not to access or use our subscription services products or our other products on their mobile devices, our user growth and user engagement and our business could be harmed.
We compete in a rapidly evolving and fiercely competitive market, and we expect competition to continue to be intense, including price competition. Our principal competitors in the consumer market include ARRIS, ASUS, D-Link, Eero (owned by Amazon), Linksys (owned by Foxconn), Google WiFi, and TP-Link.
We compete in a rapidly evolving and fiercely competitive market, and we expect competition to continue to be intense, including price competition. Our principal competitors in the consumer market include ARRIS, ASUS, D-Link, Eero (owned by Amazon), and TP-Link.
Other competitors may have fewer resources but may be more nimble in developing new or disruptive technology or in entering new markets. We 19 Table of Contents anticipate that current and potential competitors will also intensify their efforts to penetrate our target markets.
Other competitors may have fewer resources but may be more nimble in developing new or disruptive technology or in entering new markets. We anticipate that current and potential competitors will also intensify their efforts to penetrate our target markets.
If we fail to properly interpret or otherwise comply with any such obligations, we may face significant fines and penalties that could adversely affect our business, financial condition and results of operations. Furthermore, obligations (including laws and regulations) are not consistent and compliance remains costly.
If we fail to properly interpret or otherwise comply with any such obligations, we may face significant fines and penalties that could adversely affect our business, financial condition and results of operations. Furthermore, obligations (including laws and regulations) are not consistent (and may not be interpreted in a consistent manner) and compliance remains costly.
If new or existing customers have difficulty with our software solutions or are dissatisfied with our services, our operating margins could be adversely affected, and we could face possible claims if we fail to meet our customers’ expectations.
If new or existing customers have difficulty with our software solutions or are dissatisfied with our services, our operating margins could be adversely 36 Table of Contents affected, and we could face possible claims if we fail to meet our customers’ expectations.
In addition, as mentioned above in the risk factor " Accurately managing our sales channel inventory and product mix within the current environment is 27 Table of Contents challenging, and we have, and may in the future, incur costs associated with excess inventory, or lose sales from having too few products, " many of our retail and service provider customers have and continue to reduce their target inventory levels to more closely match with product demand.
In addition, as mentioned above in the risk factor " Optimizing our channel partners' inventory levels and product mix within the current environment is challenging, and we have, and may in the future, incur costs associated with excess inventory, or lose sales from having too few products, " many of our retail and service provider customers have and continue to reduce their target inventory levels to more closely match with product demand.
If our products or services are compromised, a significant number or, in 31 Table of Contents some instances, all of our customers and their data could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large-scale event could result in irreparable harm.
If our products or services are compromised, a significant number or, in some instances, all of our customers could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large-scale event could result in irreparable harm.
We obtain several key components from limited or sole sources, and if these sources fail to satisfy our supply requirements or we are unable to properly manage our supply requirements with our third-party manufacturers, we may lose sales and experience increased component costs.
Risks Related to our Business, Industry and Operations We obtain several key components from limited or sole sources, and if these sources fail to satisfy our supply requirements or we are unable to properly manage our supply requirements with our third-party manufacturers, we may lose sales and experience increased component costs.
In addition, actions to mitigate the effect of these tariffs are disruptive on our operations, may not be completely successful and may result in higher long-term manufacturing costs. Moreover, there is no certainty that countries to which we have shifted our manufacturing operations will not be subject to similar tariffs in the future.
In addition, actions to mitigate the effect of new regulations could be disruptive to our operations, may not be completely successful and may result in higher long-term manufacturing costs. Moreover, there is no certainty that countries to which we have shifted our manufacturing operations will not be subject to similar tariffs in the future.
For example, as mentioned above in the risk factor “ Accurately managing our sales channel inventory and product mix within the current environment is challenging, and we have, and may in the future, 17 Table of Contents incur costs associated with excess inventory, or lose sales from having too few products, ” many of our retail and service provider customers have and continue to reduce their target inventory levels.
For example, as mentioned above in the risk factor “ Optimizing our channel partners' inventory levels and product mix within the current environment is challenging, and we have, and may in the future, incur costs associated with excess inventory, or lose sales from having too few products, ” many of our retail and service provider customers have reduced and continue to reduce their target inventory levels.
For example, when the U.S. government engaged in extended trade negotiations with China, which resulted in the implementation of tariffs on a significant number of products manufactured in China and imported into the United States, we worked closely with our manufacturing partners to implement ways to mitigate the impact of these tariffs on our supply chain as promptly and reasonably as practicable, including shifting production outside of China.
For example, when the U.S. government engaged in extended trade negotiations with China, which resulted in the implementation of tariffs on a significant number of products manufactured in China and imported into the United States, we worked closely with our manufacturing partners to implement ways to mitigate the impact of these tariffs on our supply chain as promptly and reasonably as practicable, ultimately leading to the successful shift of our manufacturing entirely outside of China.
In addition, significant negative industry or economic trends, such as those that have occurred as a result of the recent economic downturn, including reduced estimates of future cash flows or disruptions to our business could indicate that goodwill might be impaired.
As a result of our acquisitions, we have significant goodwill recorded on our balance sheets. In addition, significant negative industry or economic trends, such as those that have occurred as a result of the recent economic downturn, including reduced estimates of future cash flows or disruptions to our business could indicate that goodwill might be impaired.
These changes could increase our total tax burden in the future. In addition, the acceleration of employee mobility as a result of the pandemic potentially increases the jurisdictional tax risk of our workforce. Changes in tax laws could affect the distribution of our earnings, result in double taxation and adversely affect our results.
In addition, the acceleration of employee mobility as a result of the pandemic potentially increases the jurisdictional tax risk of our workforce. Changes in tax laws could affect the distribution of our earnings, result in double taxation and adversely affect our results.
Risks Related to our Business, Industry and Operations Optimizing our channel partners' inventory levels and product mix within the current environment is challenging, and we have, and may in the future, incur costs associated with excess inventory, or lose sales from having too few products.
Optimizing our channel partners' inventory levels and product mix within the current environment is challenging, and we have, and may in the future, incur costs associated with excess inventory, or lose sales from having too few products.
Global economic conditions could materially adversely affect our revenue and results of operations. Our business has been and may continue to be affected by a number of factors that are beyond our control, such as general geopolitical, economic and business conditions, conditions in the financial markets, and changes in the overall demand for Pro AV, networking and smart home products.
Our business has been and may continue to be affected by a number of factors that are beyond our control, such as general geopolitical, economic and business conditions, conditions in the financial markets, and changes in the overall demand for Pro AV, networking and smart home products.
Failure to manage and successfully integrate acquisitions could materially harm our business and operating results. In addition, if stock market analysts or our stockholders do not support or believe in the value of the acquisitions that we choose to undertake, our stock price may decline.
We cannot ensure that we will be successful in selecting, executing and integrating acquisitions. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results. In addition, if stock market analysts or our stockholders do not support or believe in the value of the acquisitions that we choose to undertake, our stock price may decline.
Some of these entities purchase our products through our wholesale distributor customers. We generally have no minimum purchase commitments or long-term contracts with any of these third parties. Traditional retailers have limited shelf space and promotional budgets, and competition is intense for these resources.
Our sales channels consist of traditional retailers, online retailers, DMRs, MSPs, and broadband service providers. Some of these entities purchase our products through our wholesale distributor customers. We generally have no minimum purchase commitments or long-term contracts with any of these third parties. Traditional retailers have limited shelf space and promotional budgets, and competition is intense for these resources.
There is risk that we do not ultimately close and sign a definitive contract. If this occurs, the timing of revenue recognition is uncertain and our business would be harmed. In addition, we often commence building custom-made products prior to execution of a contract in order to meet the customer’s contemplated launch dates and requirements.
If this occurs, the timing of revenue recognition is uncertain and our business would be harmed. In addition, we often commence building custom-made products prior to execution of a contract in order to meet the customer’s contemplated launch dates and requirements.
If we were to lose a service provider customer for any reason, we may experience a material and immediate reduction in forecasted revenue that may cause us to be below our net revenue and operating margin expectations for a particular period of time and therefore adversely affect our stock price.
If this occurs, our business would be harmed and our revenues would be reduced. 25 Table of Contents If we were to lose a service provider customer for any reason, we may experience a material and immediate reduction in forecasted revenue that may cause us to be below our net revenue and operating margin expectations for a particular period of time and therefore adversely affect our stock price.
We have not in the past and may not in the future be able to discover and protect against these threats and vulnerabilities, and our inability to remedy compromises of our products, services or data in a timely manner, or at all, may impact our brand and reputation and otherwise harm our business.
We have not in the past and may not in the future successfully discover, get ahead of and/or protect against these threats and vulnerabilities, and if unable to remedy compromises of our products, services or data in a timely manner, or at all, it may impact our brand and reputation and otherwise harm our business.
If we are unable to introduce new products with sufficiently advanced technology to attract service provider interest in a timely manner, our service provider customers may then require us to lower our prices, or they may choose to purchase products from our competitors. If this occurs, our business would be harmed and our revenues would be reduced.
If we are unable to introduce new products with sufficiently advanced technology to attract service provider interest in a timely manner, our service provider customers may then require us to lower our prices, or they may choose to purchase products from our competitors.
Additionally, our systems and products may be disrupted for reasons other than a cyberattack, such as software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, and floods.
Additionally, our systems and products may be disrupted for reasons other than a cyberattack, such as software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, and floods. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.
Some specific factors that may have a significant effect on our common stock market price include: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • actual or anticipated changes in the growth rate of the general networking sector, our growth rates or our competitors’ growth rates; • conditions in the financial markets in general or changes in general economic, political and market conditions, including government efforts to mitigate economic downturns or control inflation; • novel and unforeseen market forces and trading strategies, such as the massive short squeeze rally caused by retail investors on companies such as GameStop; • actual or anticipated changes in governmental regulation, including taxation and tariff policies; • interest rate or currency exchange rate fluctuations; • our ability to forecast or report accurate financial results; and • changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally.
Some specific factors that may have a significant effect on our common stock market price include: • actual or anticipated fluctuations in our operating results or our competitors’ operating results; • actual or anticipated changes in the growth rate of the general networking sector, our growth rates or our competitors’ growth rates; • conditions in the financial markets in general or changes in general economic, political and market conditions, including government efforts to mitigate economic downturns or control inflation; • actual or anticipated changes in governmental regulation, including taxation and tariff policies; • interest rate or currency exchange rate fluctuations; 45 Table of Contents • our ability to forecast or report accurate financial results; and • changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally.
If these financial institutions default on their obligations or their credit ratings are negatively impacted by liquidity issues, credit deterioration or losses, financial results, or other factors, the value of our cash equivalents and short-term investments could decline and result in a material impairment, which could have a material adverse effect on our financial condition and operating results. 40 Table of Contents Governmental regulations of imports or exports affecting Internet security could affect our net revenue.
If these financial institutions default on their obligations or their credit ratings are negatively impacted by liquidity issues, credit deterioration or losses, financial results, or other factors, the value of our cash equivalents and short-term investments could decline and result in a material impairment, which could have a material adverse effect on our financial condition and operating results.
Changes in trade policy in the United States and other countries, including the imposition of tariffs and the resulting consequences, may adversely impact our business, results of operations and financial condition.
Changes in trade policy and regulation in the United States and other countries, including but not limited to the imposition of tariffs, may adversely impact our business, results of operations and financial condition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe cybersecurity committee receives periodic notices (written and verbal) from the Cybersecurity Team concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented that are intended to address them.
Biggest changeThe cybersecurity committee receives periodic notices (written and verbal) from the Cybersecurity Team concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented that are intended to address them. The cybersecurity committee also receives quarterly reports, summaries or presentations related to the Company's cybersecurity program as it relates to both our corporate systems and products.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: (1) having an information security incident response plan for incident detection and response; (2) maintaining a disaster recovery plan, business continuity program, vulnerability management process and vendor risk management process; (3) conducting periodic risk assessments and employee training on cybersecurity; (4) maintaining security controls intended to address certain recognized industry cyber frameworks; (5) encrypting and segregating data, having network security controls, access controls and physical security, monitoring systems, managing assets (tracking and disposal) and conducting penetration testing; and (6) maintaining cybersecurity insurance.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: (1) having an information security incident response plan for incident detection and response; (2) maintaining a disaster recovery plan, business continuity program, 46 Table of Contents vulnerability management process and vendor risk management process; (3) conducting periodic risk assessments and employee training on cybersecurity; (4) maintaining security controls intended to address certain recognized industry cyber frameworks; (5) encrypting and segregating data, having network security controls, access controls and physical security, monitoring systems, managing assets (tracking and disposal) and conducting penetration testing; and (6) maintaining cybersecurity insurance.
For example, (1) cybersecurity risk is addressed as a component of the Company’s enterprise risk management program; (2) our Cybersecurity Team works with our management team in an effort to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our Cybersecurity Team and management team evaluates material risks from cybersecurity threats against our overall business objectives and reports to the cybersecurity committee chairperson of the board of 44 Table of Contents directors who may then notify the cybersecurity committee and board of directors (as appropriate), to further evaluate our overall enterprise risk.
For example, (1) cybersecurity risk is addressed as a component of the Company’s enterprise risk management program; (2) our Cybersecurity Team works with our management team in an effort to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our Cybersecurity Team and management team evaluates material risks from cybersecurity threats against our overall business objectives and reports to the cybersecurity committee chairperson of the board of directors who may then notify the cybersecurity committee and board of directors (as appropriate), to further evaluate our overall enterprise risk.
We use third-party service providers to perform a variety of functions throughout our business, such as using application providers for core applications (including finance, HR, CRM, email services, collaboration tools etc.), hosting companies for our websites, contract manufacturing organizations, distributors and supply chain resources for software, hardware, manufacturing and distribution of our products.
We use third-party service providers to perform a variety of functions throughout our business, such as using application providers for core applications (including finance, HR, CRM, email services, collaboration tools etc.), hosting c ompanies for our websites, contract manufacturing organizations, distributors and supply chain resources for software, hardware, manufacturing and distribution of our products.
Our Chief Information Officer and Chief Technology Officer of Software are responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our information security incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the incident response leadership team.
She is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. 47 Table of Contents Our information security incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the incident response leadership team.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Chief Information Officer, our VP of Corporate Cybersecurity and our Chief Technology Officer of Software, each of whom have over 20 years of industry expertise, including past roles at other public companies and as consultants.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our General Counsel & Chief Privacy Officer, Head of Corporate Security and Head of Product Security, each of whom have substantial industry expertise, including past experience in cyber security in roles at other public companies.
Our Chief Information Officer and Chief Technology Officer of Software are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our General Counsel & Chief Privacy Officer , who has worked in the privacy and cyber security space since 2008, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
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The cybersecurity committee also receives quarterly reports, summaries or presentations related to the Company's cybersecurity program as it relates to both our corporate systems and products. 45 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our principal administrative, sales, marketing, and research and development facilities currently occupy approximately 142,700 square feet in an office complex in San Jose, California, under a lease that expires in September 2025.
Biggest changeItem 2. Properties Our principal administrative, sales, marketing, and research and development facilities currently occupy approximately 89,409 square feet in an office complex in San Jose, California, under a lease that expires in September 2036. This lease replaced our previous headquarters lease, which expired in September 2025, around the time of our relocation to the new facility.
We maintain research and development facilities in Richmond B.C. (Canada), Taipei (Taiwan), and Bangalore (India). From time to time, we consider various alternatives related to our long-term facilities’ needs.
We maintain research and development facilities in Richmond B.C. (Canada), Taipei (Taiwan), Chennai (India), and Bangalore (India). From time to time, we consider various alternatives related to our long-term facilities’ needs.
We have invested in internal capacity and strategic relationships with outside manufacturing vendors as needed to meet anticipated demand for our products. We use third parties to provide warehousing services to us in facilities located in both Northern and Southern California, Netherlands, Singapore and Australia.
We have invested in internal capacity and strategic relationships with outside manufacturing vendors as needed to meet anticipated demand for our products. We use third parties to provide warehousing services to us in facilities located in Southern California, Netherlands, and Singapore.
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In September 2024, we entered into a lease agreement to relocate our principal facilities to another office complex that occupies approximately 89,409 square feet in San Jose, California. This new lease will commence in 2025 and expires in September 2036.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth under the heading “Litigation and Other Legal Matters” in Note 8, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K, is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings The information set forth under the heading “Litigation and Other Legal Matters” in Note 9, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K, is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchase of Equity Securities by the Company Period Total Number of Shares Purchased (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (In millions) September 30, 2024 - October 27, 2024 957 $ 20.06 — 3.8 October 28, 2024 - November 24, 2024 223,691 $ 23.93 222,155 3.6 November 25, 2024 - December 31, 2024 202,289 $ 26.57 201,256 3.4 Total 426,937 $ 25.18 423,411 (1) From time to time, our Board of Directors has authorized programs under which we may repurchase shares of our common stock, depending on market conditions, in the open market or through privately negotiated transactions.
Biggest changeRepurchase of Equity Securities by the Company Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs September 29, 2025 - October 26, 2025 — $ — — 2,026,685 October 27, 2025 - November 23, 2025 340,590 $ 29.00 340,590 1,686,095 November 24, 2025 - December 31, 2025 198,216 $ 25.84 198,216 1,487,879 Total 538,806 $ 27.84 538,806 (1) From time to time, our Board of Directors has authorized programs under which we may repurchase shares of our common stock, depending on market conditions, in the open market or through privately negotiated transactions.
Recent Sales of Unregistered Securities None. 47 Table of Contents Stock Performance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “soliciting material” under the Exchange Act and shall not be incorporated by reference into any such filings.
Recent Sales of Unregistered Securities None. 49 Table of Contents Stock Performance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “soliciting material” under the Exchange Act and shall not be incorporated by reference into any such filings.
Data for the Nasdaq Composite Index and the Nasdaq Computer Index assume reinvestment of dividends. We have never paid dividends on our common stock and have no present plans to do so. 48 Table of Contents
Data for the Nasdaq Composite Index and the Nasdaq Computer Index assume reinvestment of dividends. We have never paid dividends on our common stock and have no present plans to do so. 50 Table of Contents
The following graph shows a comparison from December 31, 2019 through December 31, 2024 of cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Computer Index. Such returns are based on historical results and are not intended to suggest future performance.
The following graph shows a comparison from December 31, 2020 through December 31, 2025 of cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Computer Index. Such returns are based on historical results and are not intended to suggest future performance.
Holders of Common Stock On February 7, 2025, there were 68 stockholders of record, one of which was Cede & Co., a nominee for Depository Trust Company (“DTC”).
Holders of Common Stock On February 6, 2026, there were 70 stockholders of record, one of which was Cede & Co., a nominee for Depository Trust Company (“DTC”).
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(2) During the three months ended December 31, 2024, we repurchased and retired, as reported on trade date, approximately 4,000 shares of common stock at a cost of approximately $79,000 to facilitate tax withholding for Restricted Stock Units.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRecent Accounting Pronouncements For a complete description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, refer to Note 1, The Company and Summary of Significant Accounting Policies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. 54 Table of Contents Results of Operations The following table sets forth, for the periods presented, the consolidated statements of operations data, which is derived from the accompanying consolidated financial statements: Year Ended December 31, (In thousands, except percentage data) 2024 2023 2022 Net revenue $ 673,759 100.0 % $ 740,840 100.0 % $ 932,472 100.0 % Cost of revenue 477,832 70.9 % 491,588 66.4 % 681,923 73.1 % Gross profit 195,927 29.1 % 249,252 33.6 % 250,549 26.9 % Operating expenses: Research and development 81,082 12.0 % 83,295 11.2 % 88,443 9.5 % Sales and marketing 123,694 18.4 % 127,778 17.4 % 139,675 15.0 % General and administrative 63,468 9.4 % 66,243 8.9 % 56,316 6.0 % Litigation reserves, net (89,012 ) (13.2 )% 178 0.0 % 20 0.0 % Restructuring and other charges 4,479 0.7 % 3,962 0.5 % 4,577 0.5 % Goodwill impairment — — % — — % 44,442 4.8 % Intangibles impairment — — % 1,071 0.1 % — — % Total operating expenses 183,711 27.3 % 282,527 38.1 % 333,473 35.8 % Income (loss) from operations 12,216 1.8 % (33,275 ) (4.5 )% (82,924 ) (8.9 )% Other income, net 12,672 1.9 % 14,139 1.9 % 902 0.1 % Income (loss) before income taxes 24,888 3.7 % (19,136 ) (2.6 )% (82,022 ) (8.8 )% Provision for (benefit from) income taxes 12,525 1.9 % 85,631 11.5 % (13,035 ) (1.4 )% Net income (loss) $ 12,363 1.8 % $ (104,767 ) (14.1 )% $ (68,987 ) (7.4 )% 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.
Biggest changeResults of Operations The following table sets forth, for the periods presented, the consolidated statements of operations data, which is derived from the accompanying consolidated financial statements: Year Ended December 31, (In thousands, except percentage data) 2025 2024 2023 Net revenue $ 699,621 100.0% $673,759 100.0% $ 740,840 100.0% Cost of revenue 433,430 62.0% 477,832 70.9% 491,588 66.4% Gross profit 266,191 38.0% 195,927 29.1% 249,252 33.6% Operating expenses: Research and development 85,721 12.3% 81,082 12.0% 83,295 11.2% Sales and marketing 127,733 18.2% 123,694 18.4% 127,778 17.4% General and administrative 78,916 11.3% 63,468 9.4% 66,243 8.9% Litigation reserves, net 209 0.0% (89,012) (13.2)% 178 0.0% Restructuring and other charges 7,764 1.1% 4,479 0.7% 3,962 0.5% Intangible assets impairment — —% — —% 1,071 0.1 % Total operating expenses 300,343 42.9% 183,711 27.3% 282,527 38.1% Income (loss) from operations (34,152) (4.9)% 12,216 1.8% (33,275) (4.5)% Other income, net 17,376 2.5% 12,672 1.9% 14,139 1.9% Income (loss) before income taxes (16,776) (2.4)% 24,888 3.7% (19,136) (2.6)% Provision for income taxes 1,147 0.2% 12,525 1.9% 85,631 11.5% Net income (loss) $ (17,923) (2.6)% $12,363 1.8% $ (104,767) (14.1)% 56 Table of Contents 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.
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 matters described in Note 8, Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
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 matters described in Note 9, Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For a detailed discussion of our common stock repurchases, refer to Note 9, Stockholders’ Equity , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For a detailed discussion of our common stock repurchases, refer to Note 10, Stockholders’ Equity , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
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 56 Table of Contents 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.
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.
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 intangibles and capitalized software development costs.
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.
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, including gain on litigation settlements.
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, imputed interest expense, and other non-operating income and expenses, including gain on litigation settlements.
The possible reduction in liabilities for uncertain tax positions in multiple jurisdictions that may impact the statements of operations in the next 12 months was approximately $1.3 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 that may impact the statements of operations in the next 12 months was approximately $1.4 million, excluding the interest, penalties and the effect of any related deferred tax assets or liabilities.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
For a detailed discussion on our purchase obligations, refer to Note 8, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. Our commitments for property and equipment purchases as of December 31, 2024 were not material. (2) Represent undiscounted non-cancellable remaining lease payments.
For a detailed discussion on our purchase obligations, refer to Note 9, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. Our commitments for property and equipment purchases as of December 31, 2025 were not material. (2) Represent undiscounted non-cancellable remaining lease payments.
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 believe that the principal competitive factors 52 Table of Contents 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.
For details on the changes in Other income, net, refer to Note 6, Other Income, Net , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For details on the changes in Other income, net, refer to Note 7, Other Income, Net, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Our contractual and other obligations are expected to be funded by our existing cash, cash equivalents and short-term investments, together with cash generated from operations. 63 Table of Contents
Our contractual and other obligations are expected to be funded by our existing cash, cash equivalents and short-term investments, together with cash generated from operations. 65 Table of Contents
A further $213.7 million of purchase orders beyond contractual termination periods remained outstanding. Consequently, we 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. Expenses incurred in respect of cancelled purchase orders have historically not been significant relative to the original order value.
A further $200.5 million of purchase orders beyond contractual termination periods remained outstanding. Consequently, we 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. Expenses incurred in respect of cancelled purchase orders have historically not been significant relative to the original order value.
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 intangibles and software development costs; and costs attributable to the provision of service offerings.
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 57 Table of Contents 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.
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 intangibles, personnel expenses for sales and marketing staff, technical support expenses, and IT and facility allocations.
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.
(6) For a detailed discussion, refer to Note 8, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. In addition, as of December 31, 2024, we had $7.3 million of total gross unrecognized tax benefits and related interest and penalties.
For a detailed discussion, refer to Note 9, Commitments and Contingencies , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. In addition, as of December 31, 2025, we had $6.5 million of total gross unrecognized tax benefits and related interest and penalties.
The extent of impacts from these macroeconomic and geopolitical trends on our ongoing operational and financial performance, including our ability to execute our business strategies in the expected time frame, will depend on future developments. The broader implications of the macroeconomic uncertainty, and any related disruptions to channel partners and freight are unpredictable.
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. The broader implications of the macroeconomic uncertainty, and any related disruptions to channel partners and freight remain unpredictable.
As of December 31, 2024, approximately 23% of our cash and cash equivalents and short-term investments were outside of the U.S. The cash and cash equivalents and short-term investments balances outside of the U.S. are subject to fluctuation based on the settlement of intercompany balances.
As of December 31, 2025, approximately 28% of our cash and cash equivalents and short-term investments were outside of the U.S. The cash and cash equivalents and short-term investments balances outside of the U.S. are subject to fluctuation based on the settlement of intercompany balances.
These balances (excluding the amounts for the office lease described below) are included on our consolidated balance sheets. These lease payments are consistent with contractual terms and are not expected to differ significantly, unless a substantial change in our headcount needs requires us to exit an office facility early or expand our occupied space.
These balances are included on our consolidated balance sheets. These lease payments are consistent with contractual terms and are not expected to differ significantly, unless a substantial change in our headcount needs requires us to exit an office facility early or expand our occupied space.
Stock Repurchases From time to time, our Board of Directors has authorized programs under which we may repurchase shares of our common stock.
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.
We include interest expense and penalties related to uncertain tax positions as additional tax expense. The Company made an accounting policy election related to accounting for the tax effects of Global Intangible Low-Taxed Income (“GILTI”) that was implemented as part of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), enacted on December 22, 2017.
The Company made an accounting policy election related to accounting for the tax effects of Global Intangible Low-Taxed Income (“GILTI”) that was implemented as part of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), enacted on December 22, 2017.
Additional information on the change, 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 , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Additional information on the changes, 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 1, , The Company and Summary of Significant Accounting Policies , and Note 12, Segment Information , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Our research and development organization is focused on enhancing our ability to introduce innovative and easy-to-use products and services.
Our research and development organization is focused on enhancing our ability to 58 Table of Contents introduce innovative and easy-to-use products and services.
Our accounts payable (excluding payables related to property and equipment) increased from $46.4 million as of December 31, 2023, to $57.4 million as of December 31, 2024, primarily due to the timing of inventory receipts and supplier payments.
Our accounts payable (excluding payables related to property and equipment) decreased from $57.4 million as of December 31, 2024, to $41.6 million as of December 31, 2025, primarily due to the timing of inventory receipts and supplier payments.
This section generally discusses the results of our operations for the year ended December 31, 2024 (“fiscal 2024”) compared to the year ended December 31, 2023 (“fiscal 2023”).
This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
These provisions resulted in a net reduction of tax of $0.5 million. 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 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.
Liquidity and Capital Resources Our principal sources of liquidity are cash, cash equivalents, short-term investments and cash generated from operations. As of December 31, 2024, we had cash, cash equivalents and short-term investment of $408.7 million, an increase of $125.0 million from December 31, 2023.
Liquidity and Capital Resources Our principal sources of liquidity are cash, cash equivalents, short-term investments and cash generated from operations. As of December 31, 2025, we had cash, cash equivalents and short-term investment of $323.0 million, a decrease of $85.7 million from December 31, 2024.
For a detailed discussion on our operating leases, refer to Note 14, Leases , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For a detailed discussion on our operating leases, refer to Note 15, Leases , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. (3) Represent non-cancellable commitments pertaining to non-trade activities.
During the year ended December 31, 2024, we repurchased and retired, reported based on trade date, approximately 2.1 million shares of common stock, at a cost of approximately $33.6 million under the repurchase authorization. As of December 31, 2024, common stock repurchases at a cost of approximately $0.5 million were pending settlement.
We repurchased and retired, reported based on trade date, approximately 1.9 million and 2.1 million shares of common stock, at a cost of approximately $50.0 million and $33.6 million under the repurchase authorization during the years ended December 31, 2025 and December 31, 2024, respectively.
Provision for (Benefit from) Income Taxes Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Provision for (benefit from) income taxes $ 12,525 (85.4 )% $ 85,631 ** $ (13,035 ) Effective tax rate 50.3 % (447.5 )% 15.9 % ___________________ ** Percentage change not meaningful. 2024 vs 2023 The tax expense in 2024 resulted primarily from the increase in profits, plus the change in valuation allowance, partially offset by the benefit from certain changes in estimate upon filing the 2023 U.S. federal tax return and the 59 Table of Contents recognition of uncertain tax benefits.
Provision for (Benefit from) Income Taxes Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Provision for income taxes $ 1,147 (90.8)% $ 12,525 (85.4)% $ 85,631 Effective tax rate (6.8)% 50.3% (447.5)% 2025 vs 2024 The tax expense in the 2025 versus 2024 years resulted primarily from the change in valuation allowance, partially offset by the benefit from certain changes in estimate upon filing the 2024 U.S. federal tax return and the recognition of uncertain tax benefits.
During the years ended December 31, 2024 and 2023, we repurchased and retired, reported based on trade date, approximately 226,000 and 198,000 shares of common stock at a cost of $3.4 million and $2.8 million, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving Restricted Stock Units.
We also withheld and reported, based on trade date, approximately 515,000 shares and 226,000 shares of common stock, at a cost of approximately $13.8 million and $3.4 million during the years ended December 31, 2025 and December 31, 2024, respectively, to facilitate the administrative process of withholding and remitting personal income and payroll taxes for individuals receiving Restricted Stock Units.
Our highly differentiated connected solutions range from switching and wireless products to augment business networks and audio and video (“AV”) over Ethernet for Pro AV applications to our good, better, and best WiFi solutions, security and support services to protect and enhance business and home networks.
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.
For our NETGEAR for Business reporting unit, we do not believe it is likely that there will be a material change in the estimates or assumptions we use to test for impairment losses on goodwill.
For our Enterprise reporting unit, we do not believe it is likely that there will be a material change in the estimates or assumptions we use to test for impairment losses on goodwill. However, if the actual results are not consistent with our estimates or assumptions, we may be exposed to a future impairment charge that could be material.
The following table presents general and administrative expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 General and administrative $ 63,468 (4.2 )% $ 66,243 17.6 % $ 56,316 2024 vs 2023 The decrease in general and administrative expenses for fiscal 2024, compared to the prior year, was primarily due to a decrease in legal and professional services fees of $13.9 million, mainly attributable to a $10.9 million reduction in expenses to offset the legal fees incurred to date associated with the litigation settlement payment from TP-Link.
The following table presents general and administrative expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 General and administrative $ 78,916 24.3% $ 63,468 (4.2)% $ 66,243 2025 vs 2024 The increase in general and administrative expenses in the year ended December 31, 2025, compared to the prior year, was primarily due to the absence of a $10.9 million reduction in expenses recorded in the prior year period to offset legal fees associated with the successful TP-Link litigation settlement.
Our retail channel includes traditional and online retail locations both domestically and internationally, such as Amazon.com (worldwide), Best Buy, Wal-Mart, Staples, Office Depot, Target, Electra (Sweden), Fnac Darty (Europe), JB HiFi (Australia), Elkjop (Norway), and Boulanger (France). Our DMRs include CDW Corporation, Insight Corporation, and PC Connection in domestic markets.
Our main wholesale distributors include Ingram Micro, TD Synnex, and D&H Distribution Company. Our retail channel includes traditional and online retail locations both domestically and internationally, such as Amazon.com (worldwide), Best Buy, Wal-Mart, Staples, Office Depot, Target, Electra (Sweden), Fnac Darty (Europe), JB HiFi (Australia), Elkjop (Norway), and Boulanger (France).
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, allowance for doubtful accounts, IT and facility allocations, and other general corporate expenses.
Marketing expenditure committed with a customer is generally recorded as a reduction of revenue per authoritative guidance. 59 Table of Contents 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.
Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice, historical pricing information, current pricing trends, and channel inventory levels.
Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice, historical pricing information, current pricing trends, and channel inventory levels. We continue to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur.
We believe that deferred tax assets recorded for foreign jurisdictions are recoverable; however, if there were a change in our ability to recover these assets, we would be required to take a charge in the period in which we determined that recovery was not more likely than not.
We believe that deferred tax assets recorded for foreign jurisdictions are recoverable; however, if there were a change in our ability to recover these assets, we would be required to take a charge in the period in which we determined that recovery was not more likely than not. 55 Table of Contents Uncertain tax provisions are recognized under guidance that provides that a company should use a more-likely-than-not recognition threshold based on the technical merits of the income tax position taken.
Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Americas $ 456,040 (9.6 )% $ 504,349 (18.3 )% $ 617,211 Percentage of net revenue 67.7 % 68.1 % 66.2 % EMEA $ 127,260 (14.5 )% $ 148,922 (17.0 )% $ 179,358 Percentage of net revenue 18.9 % 20.1 % 19.2 % APAC $ 90,459 3.3 % $ 87,569 (35.6 )% $ 135,903 Percentage of net revenue 13.4 % 11.8 % 14.6 % Total net revenue $ 673,759 (9.1 )% $ 740,840 (20.6 )% $ 932,472 2024 vs 2023 Americas Net revenue in Americas decreased in fiscal 2024, primarily attributable to a decline in Connected Home segment's net revenue of 13.0%, compared to the prior year.
Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Americas $ 476,020 4.4% $ 456,040 (9.6)% $ 504,349 Percentage of net revenue 68.0 % 67.7 % 68.1 % EMEA $ 139,602 9.7% $ 127,260 (14.5)% $ 148,922 Percentage of net revenue 20.0 % 18.9 % 20.1 % APAC $ 83,999 (7.1)% $ 90,459 3.3% $ 87,569 Percentage of net revenue 12.0 % 13.4 % 11.8 % Total net revenue $ 699,621 3.8% $ 673,759 (9.1)% $ 740,840 2025 vs 2024 Americas Net revenue in Americas increased in the year ended December 31, 2025, primarily attributable to an increase of 22.5% in Enterprise segment's net revenue, partially offset by a decline of 4.0% in Consumer segment's net revenue compared to the prior year.
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.
The increase was partially offset by a decrease in engineering projects and outside professional service fees of $2.6 million. 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 our gross margin in the first fiscal quarter of 2025 to be higher than the same quarter of 2024 level. 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.
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.
Cash Flows The following table presents our cash flows for the periods presented: Year Ended December 31, (In thousands) 2024 2023 2022 Cash provided by (used in) operating activities $ 164,797 $ 56,853 $ (13,732 ) Cash used in investing activities (26,157 ) (27,433 ) (79,517 ) Cash provided by (used in) financing activities (28,913 ) 797 (24,023 ) Net cash increase (decrease) $ 109,727 $ 30,217 $ (117,272 ) 2024 vs 2023 Operating activities Net cash provided by operating activities increased by $107.9 million in fiscal 2024, compared to the prior year, primarily due to a net proceed before tax of $103.6 million resulting from the litigation settlement payment from TP-Link and favorable working capital movements.
Cash Flows The following table presents our cash flows for the periods presented: Year Ended December 31, (In thousands) 2025 2024 2023 Cash provided by operating activities $ 1,606 $ 164,797 $ 56,853 Cash used in investing activities (22,641) (26,157) (27,433) Cash provided by (used in) financing activities (55,505) (28,913) 797 Net cash increase (decrease) $ (76,540) $ 109,727 $ 30,217 2025 vs 2024 Operating activities Net cash provided by operating activities decreased by $163.2 million in the year ended December 31, 2025, compared to the prior year, primarily due to $103.6 million of pre-tax net proceeds received in the prior year from the TP- Link litigation settlement, as well as unfavorable working capital movements in the current year.
Restructuring and Other Charges The following table presents restructuring and other charge for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Restructuring and other charges $ 4,479 13.0 % $ 3,962 (13.4 )% $ 4,577 2024 vs 2023 The restructuring and other charges were slightly higher in fiscal 2024, compared to the prior year.
Restructuring and Other Charges The following table presents restructuring and other charge for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Restructuring and other charges $ 7,764 73.3% $ 4,479 13.0% $ 3,962 60 Table of Contents 2025 vs 2024 The increase in restructuring and other charges in the year ended December 31, 2025, compared to the prior year, was primarily due to restructuring activities initiated in January 2025 and carried out throughout the year.
The following table presents costs of revenue and gross margin for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Cost of revenue $ 477,832 (2.8 )% $ 491,588 (27.9 )% $ 681,923 Gross margin percentage 29.1 % 33.6 % 26.9 % 2024 vs 2023 Gross margin percentage decreased for fiscal 2024, compared to the prior year, primarily attributable to higher cost of inventory and freight costs, and higher excess and obsolete inventory expense as we accelerated the depletion of our slower moving inventory, partially offset by higher mix of NETGEAR for Business products, which generally carry higher gross margin.
The following table presents costs of revenue and gross margin, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Cost of revenue $ 433,430 (9.3)% $ 477,832 (2.8)% $ 491,588 Gross margin percentage 38.0% 29.1% 33.6% 2025 vs 2024 Gross margin percentage increased in the year ended December 31, 2025, compared to the prior year, primarily attributable to a higher mix of Enterprise products, which generally carry higher gross margins, lower inventory costs resulting from the depletion of older, higher-cost inventory, reduced sales returns, and lower charges for excess and obsolete inventory.
No goodwill impairment was recognized for our NETGEAR for Business reporting unit in the years ended December 31, 2024, 2023 and 2022. Refer to Note 3, Balance Sheet Components , in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for details.
Refer to Note 3, Balance Sheet Components, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for details.
The net revenue decline in Connected Home was mainly due to market contraction, leading to a year-over-year decline in both the retail and service provider channels.
The decline in Consumer segment's net revenue was mainly due to lower net revenue in both the retail and the service provider channels.
We did not repurchase any shares of common stock during the year ended December 31, 2023. Under the Inflation Reduction Act signed into law in 2022, the exercise tax on stock repurchases was approximately $0.2 million for the year ended December 31, 2024.
Under the Inflation Reduction Act signed into law in 2022, the excise tax on stock repurchases was approximately $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively.
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. We expect revenue through our direct online store or in-app offerings to continue to increase as a percentage of overall revenue for the foreseeable future.
We expect revenue through our direct online store or in-app offerings to continue to increase as a percentage of overall revenue for the foreseeable future.
Our standard obligation to our direct customers generally provides for a full refund if such products are not merchantable or are found to be damaged or defective. In determining estimates for future returns, we estimate variable consideration at the expected value based on management’s analysis of historical data, channel inventory levels, current economic trends and changes in customer demand.
In determining estimates for future returns, we estimate variable 54 Table of Contents consideration at the expected value based on management’s analysis of historical data, channel inventory levels, current economic trends and changes in customer demand.
We sell our products through multiple sales channels worldwide, including traditional and online retailers, wholesale distributors, direct market resellers (“DMRs”), value-added resellers (“VARs”), broadband service providers, and through our direct online store at www.netgear.com.
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”), broadband service providers, and through our direct online store at www.netgear.com.
Our NETGEAR for Business segment will receive most of our incremental investments for 2025 and we will be focused on in-sourcing our software capabilities, expanding our product portfolio that will allow us to grow our share in the sizable AV and enterprise WiFi markets.
Our research and development efforts increasingly focus on software, security, and capabilities that support subscription-based services and margin improvement. Our Enterprise segment will receive most of our incremental investments for 2026 with a focus on in-sourcing our software capabilities and expanding our product portfolio to grow our share in the sizable AV and enterprise WiFi markets.
Income from operations increased by $45.5 million in spite of lower revenue, compared to the prior year, primarily attributable to the payment received from the litigation settlement with TP-Link, leading to a contra-expense of $92.7 million in the litigation reserves, and a reduction of $10.9 million in general and administrative expenses to offset the related legal fees incurred to date.
The prior year operating income included a $92.7 million contra-expense recognized in litigation reserves related to the successful settlement of TP-Link litigation, as well as a $10.9 million reduction in general and administrative expenses to offset related legal fees.
The following table presents other income, net for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Other income, net $ 12,672 (10.4 )% $ 14,139 ** $ 902 ___________________ ** Percentage change not meaningful. 2024 vs 2023 The decrease in other income, net for fiscal 2024 was primarily due to $6.0 million cash received relating to a favorable litigation settlement for false product marketing in the prior year but not in the current year, partially offset by higher interest income resulting from higher interest rates and higher cash and short-term investment balances.
The following table presents other income, net for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Other income, net $ 17,376 37.1% $ 12,672 (10.4)% $ 14,139 2025 vs 2024 The increase in other income, net in the year ended December 31, 2025, compared to the prior year, was primarily due to $4.7 million of proceeds from the sale of patents in the current year, and higher net gains on foreign currency transactions and contracts, offset by lower interest income resulting from lower average cash and short-term investment balances.
Litigation Reserves, Net The following table presents litigation reserves, net for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Litigation reserves, net $ (89,012 ) ** $ 178 ** $ 20 ___________________ ** Percentage change not meaningful. 58 Table of Contents 2024 vs 2023 The decrease in litigation reserves, net for fiscal 2024, compared to the prior year, was mainly attributable to a contra-expense of $92.7 million associated with the litigation settlement payment from TP-Link, partially offset by a $3.6 million litigation reserve associated with a liability from a settlement.
Litigation Reserves, Net The following table presents litigation reserves, net for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Litigation reserves, net $ 209 ** $ (89,012) ** $ 178 ___________________ ** Percentage change not meaningful. 2025 vs 2024 A net litigation expense of $0.2 million was incurred in the year ended December 31, 2025, compared to a net benefit of $89.0 million in the prior year.
However, if the actual results are not consistent with our estimates or assumptions, we may be exposed to a future impairment charge that could be material. Income Taxes We account for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year.
Income Taxes We account for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year.
We remain confident in our ability to generate meaningful levels of cash, and plan to continue to opportunistically repurchase shares in the future. 62 Table of Contents Contractual and Other Obligations The following table summarizes our non-cancelable short-term and long-term contractual and other obligations as of December 31, 2024: (In thousands) Short-term Long-term Total Purchase obligations (1) (6) $ 57,430 $ — $ 57,430 Operating leases (2) 13,149 65,401 78,550 Other non-trade purchase commitments (3) (6) 1,914 9,368 11,282 Tax Act payables (4) (5) 3,756 — 3,756 $ 76,249 $ 74,769 $ 151,018 (1) Represent non-cancellable inventory-related purchase agreements with suppliers.
We remain confident in our ability to generate meaningful levels of cash, and plan to continue to opportunistically repurchase shares in the future. 64 Table of Contents Contractual and Other Obligations The following table summarizes our non-cancelable short-term and long-term contractual and other obligations as of December 31, 2025: (In thousands) Short-term Long-term Total Purchase obligations (1) $ 55,348 $ — $ 55,348 Operating leases (2) 12,925 54,113 67,038 Other non-trade commitments (3) 11,910 31,357 43,267 $ 80,183 $ 85,470 $ 165,653 (1) Represent non-cancellable inventory-related purchase agreements with suppliers.
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.
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.
The following table presents sales and marketing expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Sales and marketing $ 123,694 (3.2 )% $ 127,778 (8.5 )% $ 139,675 2024 vs 2023 The decline in sales and marketing expenses for fiscal 2024, compared to the prior year, was primarily attributable to a decrease in brand marketing expenditures of $5.7 million, partially offset by an increase in personnel-related expenditures of $1.2 million, mainly due to higher variable compensation. 57 Table of Contents We expect sales and marketing expenses as a percentage of net revenue in the first fiscal quarter of 2025 to be in line with the same quarter of 2024 level.
The following table presents sales and marketing expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Sales and marketing $ 127,733 3.3% $ 123,694 (3.2)% $ 127,778 2025 vs 2024 The increase in sales and marketing expenses in the year ended December 31, 2025, compared to the prior year, was primarily attributable to a higher personnel-related expenditure of $11.1 million, mainly due to higher head count and higher variable compensation, reflecting investments to expand our go-to-market capabilities in support of our Enterprise business.
Business and Executive Overview We are a global leader in innovative and advanced networking technologies for businesses, homes, and service providers. We deliver a wide range of intelligent solutions designed to unleash the full potential of connectivity. Our goal is to power extraordinary experiences where people collaborate and connect to a world of information and innovation.
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.
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.
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.
The following table presents research and development expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Research and development $ 81,082 (2.7 )% $ 83,295 (5.8 )% $ 88,443 2024 vs 2023 The decline in research and development expenses in fiscal 2024, compared to the prior year, was primarily driven by a decrease in IT and facility allocation of $1.4 million, and a decrease in engineering projects and outside professional service fees of $1.0 million.
The following table presents research and development expenses, for the periods indicated: Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Research and development $ 85,721 5.7% $ 81,082 (2.7)% $ 83,295 2025 vs 2024 The increase in research and development expenses in the year ended December 31, 2025, compared to the prior year, was primarily driven by a higher personnel-related expenditure of $7.1 million, mainly due to higher head count and higher variable compensation, largely in support of our Enterprise business, including expanded software development capabilities.
NETGEAR for Business Segment Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Net revenue $ 287,812 (2.1 )% $ 293,975 (21.3 )% $ 373,649 Percentage of net revenue 42.7 % 39.7 % 40.1 % Contribution income $ 44,005 (22.5 )% $ 56,765 (22.8 )% $ 73,542 Contribution margin 15.3 % 19.3 % 19.7 % 2024 vs 2023 NETGEAR for Business net revenue decreased in fiscal 2024, compared to the prior year, primarily due to our work with our channel partners to optimize their inventory carrying levels in the first half of 2024.
Enterprise Segment Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Net revenue $ 342,029 18.8% $ 287,812 (2.1)% $ 293,975 Percentage of net revenue 48.9% 42.7% 39.7% Contribution income $ 76,720 74.3% $ 44,005 (22.5)% $ 56,765 Contribution margin 22.4% 15.3% 19.3% 2025 vs 2024 Enterprise net revenue increased in the year ended December 31, 2025, compared to the prior year, primarily driven by continued strong demand for Pro AV product line of managed switches.
We completed our annual impairment test of goodwill as of the first day of the fourth fiscal quarter of 2024, or September 30, 2024. We identified the reporting units for the purpose of goodwill impairment testing as NETGEAR for Business and Connected Home and performed a qualitative test.
We identified the reporting units for the purpose of goodwill impairment testing as Enterprise and Consumer and performed a qualitative test for the Enterprise reporting unit as the Consumer reporting unit has had no goodwill since the first fiscal quarter of 2022.
Our gross margin percentage decreased 450 basis points, compared to the prior year, primarily attributable to higher cost of inventory, higher freight costs, and higher excess and obsolete inventory expense as we accelerated the depletion of our slower moving inventory, partially offset by higher mix of NETGEAR for Business products, which generally carry higher gross margin.
Our gross margin percentage increased by 890 basis points, compared to the prior year, primarily attributable to a favorable product mix weighted toward Enterprise, which generally carry higher gross margin, lower inventory costs resulting from the depletion of older, and higher-cost inventory, reduced sales returns, and lower charges for excess and obsolete inventory.
The Connected Home segment offers advanced connectivity, powerful performance, and enhanced security features right out of the box, designed to help keep families safe online, whether at home or on the go, including high-performance, dependable and easy-to-use premium WiFi networking solutions such as 4G/5G mobile products, WiFi 7 Tri-band and Quad-band mesh systems and routers, WiFi 6E, WiFi 6, and subscription services that provide consumers a range of value-added services focused on performance, security, privacy and premium support.
The Consumer segment focuses on consumers and provides high-performance, dependable and easy-to-use WiFi internet networking solutions such as multi-band WiFi 7 mesh systems and routers, subscription services offering performance, security, privacy and support, and 4G/5G mobile products, including WiFi 7 and WiFi 6/6E-enabled portable mobile hotspots and mobile routers, designed to address the demand for reliable, high-speed connectivity at home and on the go.
Uncertain tax provisions are recognized under guidance that provides that a company should use a more-likely-than-not recognition threshold based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold should be measured in order to determine the tax benefit to 53 Table of Contents be recognized in the financial statements.
Income tax positions that meet the more-likely-than-not recognition threshold should be measured in order to determine the tax benefit to be recognized in the financial statements. We include interest expense and penalties related to uncertain tax positions as additional tax expense.
NETGEAR for Business contribution income decreased in fiscal 2024, compared to the prior year, primarily due to lower net revenue, and lower gross margin achievement mainly attributable to higher cost of inventory, higher excess and obsolete inventory expense as we accelerated the depletion of our slower moving inventory, and higher freight costs. 60 Table of Contents Connected Home Segment Year Ended December 31, (In thousands, except percentage data) 2024 % Change 2023 % Change 2022 Net revenue $ 385,947 (13.6 )% $ 446,865 (20.0 )% $ 558,823 Percentage of net revenue 57.3 % 60.3 % 59.9 % Contribution (loss) income $ (26,011 ) ** $ 9,545 ** $ (17,531 ) Contribution margin (6.7 )% 2.1 % (3.1 )% ___________________ ** Percentage change not meaningful. 2024 vs 2023 Connected Home net revenue decreased in fiscal 2024, compared to the prior year, primarily due to market contraction, leading to a year-over-year decline in the retail channel, and, to a lesser extent, a decline in net revenue in service provider channel.
Consumer Segment Year Ended December 31, (In thousands, except percentage data) 2025 % Change 2024 % Change 2023 Net revenue $ 357,592 (7.3)% $ 385,947 (13.6)% $ 446,865 Percentage of net revenue 51.1% 57.3% 60.3% Contribution income (loss) $ 8,689 ** $ (26,011) ** $ 9,545 Contribution margin 2.4% (6.7)% 2.1% ___________________ ** Percentage change not meaningful. 62 Table of Contents 2025 vs 2024 Consumer net revenue decreased in the year ended December 31, 2025, compared to the prior year, primarily driven by a decline in net revenue from service provider channel, partially offset by increased revenue from WiFi 7 products.
Investing activities Net cash used in investing activities decreased by $1.3 million in fiscal 2024, compared to the prior year, mainly driven by lower net purchases of short-term investments, partially offset by higher purchases of property and equipment.
Accounts receivable decreased from $156.2 million as of December 31, 2024, to $142.0 million as of December 31, 2025, primarily due to the timing of cash collections. 63 Table of Contents Investing activities Net cash used in investing activities decreased by $3.5 million in the year ended December 31, 2025, compared to the prior year, mainly due to lower net purchases of short-term investments, partially offset by payments related to the acquisition of Exium, and higher purchases of property and equipment, primarily related to leasehold improvements for our new headquarters office.
Financial Overview During the year ended December 31, 2024, our net revenue decreased by $67.1 million, compared to the prior year, mainly driven by decreases of $60.9 million in our Connected Home segment, and $6.2 million in our NETGEAR for Business segment.
Financial Overview During the year ended December 31, 2025, our net revenue increased by $25.9 million, compared to the prior year, mainly driven by an increase of $54.2 million in our Enterprise segment, partially offset by a decrease of $28.4 million in our Consumer segment.
Despite the year-over-year decline in net revenue, we saw continued strong demand for the Pro AV product line of managed switches, which experienced double digit growth in end market sales, and growth in our services revenue. In addition, our premium portfolio of products in Connected Home segment continued to outperform the market.
The year-over-year increase in Enterprise net revenue was primarily attributable to continued strong demand for our Pro AV product line of managed switches, which experienced double-digit end-market sales growth, driven by higher average selling prices and increased unit volumes. The decrease in Consumer net revenue was primarily driven by lower net revenue in the service provider channel.
Additionally, we continually invest in research and development to create new technologies and services and to capitalize on technological inflection points and trends, such as audio and video over Ethernet, multi-Gigabit internet service to homes, WiFi 7, eSIM and future technologies.
We expect research and development expenses in the first fiscal quarter of 2026 to be higher in absolute dollars than the same quarter of 2025 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 7, eSIM and future technologies.
Refer to Item 1A, Risk Factors of Part I of this Annual Report on Form 10-K for various risks and uncertainties associated with the macroeconomic trends and uncertainty. 51 Table of Contents In 2024, we completed efforts to work with our channel partners to optimize their inventory carrying levels for both the NETGEAR for Business and Connected Home businesses and started to see more predictable performance aligned to the market during the second half of the year.
Refer to Item 1A, Risk Factors of Part I of this Annual Report on Form 10-K for various risks and uncertainties associated with the macroeconomic trends and uncertainty.
The net revenue increase in APAC in fiscal 2024, compared to the prior year, was partially offset by a decrease in our Connected Home segment’s net revenue of 15.8%, primarily driven by the lower demand for traditional broadband gateways. For further discussions specific to our NETGEAR for Business and Connected Home, refer to the "Segment Information" section below.
The decline is partially offset by an increase of 8.0% in Enterprise segment’s net revenue, primarily driven by continued strong demand for the Pro AV product line of managed switches. For further discussions specific to our Enterprise and Consumer segments, refer to the "Segment Information" section below.
Geographically, NETGEAR for Business net revenue increased in APAC but decreased in EMEA and Americas, compared to the prior year.
Geographically, Enterprise net revenue increased in all three regions, compared to the prior year.
We conduct business across three geographic regions: Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific (“APAC”).
We conduct business across three geographic territories: 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 expect research and development expenses as a percentage of net revenue in the first fiscal quarter of 2025 to be in line with or slightly higher than the same quarter of 2024 level.
The increase was also driven by a higher personnel-related expenditure of $6.6 million, primarily due to increased stock-based compensation associated with executive transitions, and higher variable compensation. We expect general and administration expenses in the first fiscal quarter of 2026 to be in line with or slightly higher than the same quarter of 2025 level.
APAC Net revenue in APAC increased in fiscal 2024, compared to the prior year, mainly attributable to an increase in NETGEAR for Business segment’s net revenue of 21.3%, primarily driven by the higher demand for the Pro AV product line of managed switches.
Enterprise segment's contribution income increased in the year ended December 31, 2025, compared to the prior year, primarily due to higher net revenue and improved gross margins, mainly driven by a higher mix of our Pro AV product line of managed switches, reduced charges for excess or obsolete inventory.
Inventory decreased from $248.9 million as of December 31, 2023 to $162.5 million as of December 31, 2024, as we made further progress in optimizing our inventory levels.
Inventory increased from $162.5 million as of December 31, 2024 to $176.5 million as of December 31, 2025, as we work to realign inventory carrying levels with projected demands.
Financing activities Net cash used in financing activities was $28.9 million in fiscal 2024, compared to net cash provided of $0.8 million in the prior year, primarily due to repurchases of our common stock in the current year, partially offset by proceeds from exercise of stock options.
Financing activities Net cash used in financing activities increased by $26.6 million in the year ended December 31, 2025, compared to the prior year, primarily due to higher repurchases of our common stock and higher payments for restricted stock unit tax withholdings.
Despite the decline in the overall consumer networking market in fiscal year 2024, our premium portfolio of products continued to outperform the market, and we saw growth in our service revenue. Geographically, Connected Home net revenue decreased across all three regions, compared to the prior year.
Geographically, Consumer net revenue decreased across all three regions, compared to the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitat ive Disclosures About Market Risk Interest Rate Risk We do not use derivative financial instruments in our investment portfolio. We have an investment portfolio of fixed income securities that are classified as available-for-sale securities, which was immaterial as of December 31, 2024 and 2023.
Biggest changeItem 7A. Quantitative and Qualitat ive Disclosures About Market Risk Interest Rate Risk We do not use derivative financial instruments in our investment portfolio. We have an investment portfolio of fixed income securities that are classified as available-for-sale securities.
Actual future gains and losses associated with our foreign currency exposures and positions may differ materially from the sensitivity analyses performed as of December 31, 2024 and 2023 due to the inherent limitations associated with predicting the foreign currency exchange rates, and our actual exposures and positions.
Actual future gains and losses associated with our foreign currency exposures and positions may differ materially from the sensitivity analyses performed as of December 31, 2025 and 2024 due to the inherent limitations associated with predicting the foreign currency exchange rates, and our actual exposures and positions.
We monitor our interest rate and credit risks, including our credit exposure to specific rating categories and to individual issuers. There were no impairment charges on such investments during fiscal years 2024, 2023 and 2022.
We monitor our interest rate and credit risks, including our credit exposure to specific rating categories and to individual issuers. There were no impairment charges on such investments during fiscal years 2025, 2024 and 2023.
For additional disclosure on our foreign currency contracts, refer to Note 4, Derivative Financial Instruments, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. As of December 31, 2024 and 2023, we had net assets in various local currencies.
For additional disclosure on our foreign currency contracts, refer to Note 5, Derivative Financial Instruments, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. As of December 31, 2025 and 2024, we had net assets in various local currencies.
A hypothetical 10% movement in foreign exchange rates would result in a before-tax positive or negative impact of approximately $0.7 million, $0.7 million and $1.0 million net income (loss), net of our hedged position as of December 31, 2024, 2023 and 2022, respectively.
A hypothetical 10% movement in foreign exchange rates would result in a before-tax positive or negative impact of approximately $0.6 million, $0.7 million and $0.7 million net income (loss), net of our hedged position as of December 31, 2025, 2024 and 2023, respectively.
For the years ended December 31, 2024, 2023, and 2022, 24% of total net revenue was denominated in a currency other than the U.S. dollar. 64 Table of Contents
For the years ended December 31, 2025, 2024, and 2023, 25%, 24% and 24% of total net revenue was denominated in a currency other than the U.S. dollar, respectively. 66 Table of Contents

Other NTGR 10-K year-over-year comparisons