NETGEAR, INC. Fair Value Disclosure
Note 13. Fair Value Measurements
The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The following tables summarize assets and liabilities measured at fair value on a recurring basis:
|
|
|
December 31, 2025 |
||||||
(In thousands) |
|
|
Total |
|
|
Quoted market |
|
|
Significant |
Assets: |
|
|
|
|
|
|
|
|
|
Cash equivalents: money-market funds |
|
$ |
107,070 |
|
$ |
107,070 |
|
$ |
— |
Available-for-sale investments: U.S. treasury securities(1) |
|
|
110,210 |
|
|
— |
|
|
110,210 |
Trading securities: mutual funds(1) |
|
|
2,922 |
|
|
2,922 |
|
|
— |
Foreign currency forward contracts(2) |
|
|
315 |
|
|
— |
|
|
315 |
Total assets measured at fair value |
|
$ |
220,517 |
|
$ |
109,992 |
|
$ |
110,525 |
Liabilities: |
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts(3) |
|
$ |
729 |
|
$ |
— |
|
$ |
729 |
Total liabilities measured at fair value |
|
$ |
729 |
|
$ |
— |
|
$ |
729 |
|
|
|
December 31, 2024 |
||||||
(In thousands) |
|
|
Total |
|
|
Quoted market |
|
|
Significant |
Assets: |
|
|
|
|
|
|
|
|
|
Cash equivalents: money-market funds |
|
$ |
111,043 |
|
$ |
111,043 |
|
$ |
— |
Available-for-sale investments: U.S. treasury securities(1) |
|
|
119,370 |
|
|
— |
|
|
119,370 |
Trading securities: mutual funds(1) |
|
|
2,876 |
|
|
2,876 |
|
|
— |
Foreign currency forward contracts(2) |
|
|
1,053 |
|
|
— |
|
|
1,053 |
Total assets measured at fair value |
|
$ |
234,342 |
|
$ |
113,919 |
|
$ |
120,423 |
Liabilities: |
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts(3) |
|
$ |
273 |
|
$ |
— |
|
$ |
273 |
Total liabilities measured at fair value |
|
$ |
273 |
|
$ |
— |
|
$ |
273 |
The Company’s investments in money-market funds and mutual funds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company’s investments in U.S. treasury securities are classified within Level 2 of the fair value hierarchy because they are valued based on readily available pricing sources for comparable or identical instruments in less active markets. The Company’s foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that consider the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.