NETGEAR, INC. Revenue Disclosure
Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Transaction Price Allocated to the Remaining Performance Obligations
Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2025:
(In thousands) |
|
|
Less than 1 year |
|
|
to 2 years |
|
|
Beyond years |
|
|
Total |
Performance obligations |
|
$ |
50,726 |
|
$ |
2,355 |
|
$ |
1,904 |
|
$ |
54,985 |
Contract Costs
Costs to fulfill a contract are capitalized when they relate directly to an existing contract or specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations and are recoverable. These costs include direct cost incurred at inception of a contract which enables the fulfillment of the performance obligation and totaled $6.4 million and $6.3 million as of December 31, 2025 and 2024, respectively. There was no impairment of capitalized contract costs during the years ended December 31, 2025, 2024 and 2023.
Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in Sales and marketing and General and administrative expenses. If the incremental direct costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. As of December 31, 2025 and 2024, deferred commissions were not significant.
Contract Balances
The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the consolidated balance sheets.
Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.
The following table reflects the contract balances:
(In thousands) |
|
Balance Sheet Location |
|
|
December 31, 2025 |
|
|
December 31, 2024 |
Accounts receivable, net |
|
Accounts receivable, net |
|
$ |
142,045 |
|
$ |
156,210 |
Contract liabilities – current |
|
Deferred revenue |
|
$ |
26,904 |
|
$ |
30,261 |
Contract liabilities – non-current |
|
Other non-current liabilities |
|
$ |
4,206 |
|
$ |
5,101 |
The difference in the balances of the Company’s contract assets and liabilities as of December 31, 2025 and 2024 primarily results from the timing difference between the Company’s performance and the customer’s payment.
During the years ended December 31, 2025, 2024 and 2023, $47.2 million, $51.1 million and $48.4 million, respectively, of revenue were deferred due to unsatisfied performance obligations for service contracts and undelivered product commitments, $51.5 million, $47.7 million and $41.4 million, respectively, of revenue were recognized for the satisfaction of performance obligations, and $30.4 million, $27.4 million and $21.5 million, respectively, of this recognized revenue were included in the contract liability balance at the beginning of the period, respectively.
There were no significant changes in estimates during the periods that would affect the contract balances.
Disaggregation of Revenue
In the following table, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific (“APAC”). The table also includes reconciliations of the disaggregated revenue by reportable segment. Refer to “Segments” in Note 1, The Company and Summary of Significant Accounting Policies, for information regarding the Company’s segment changes during 2025. As of December 31, 2025, the Company operated and reported in two segments: Enterprise (formerly NETGEAR for Business), and Consumer (formerly reported as
Connected Home). Sales and usage-based taxes are excluded from net revenue.
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
||||||||||||||||||
(In thousands) |
|
|
Enterprise |
|
|
Consumer |
|
|
Total |
|
|
Enterprise |
|
|
Consumer |
|
|
Total |
|
|
Enterprise |
|
|
Consumer |
|
|
Total |
Geographic regions (1) : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
176,791 |
|
$ |
299,229 |
|
$ |
476,020 |
|
$ |
144,336 |
|
$ |
311,704 |
|
$ |
456,040 |
|
$ |
146,045 |
|
$ |
358,304 |
|
$ |
504,349 |
EMEA |
|
|
106,195 |
|
|
33,407 |
|
|
139,602 |
|
|
88,782 |
|
|
38,478 |
|
|
127,260 |
|
|
102,839 |
|
|
46,083 |
|
|
148,922 |
APAC |
|
|
59,043 |
|
|
24,956 |
|
|
83,999 |
|
|
54,694 |
|
|
35,765 |
|
|
90,459 |
|
|
45,091 |
|
|
42,478 |
|
|
87,569 |
Total |
|
$ |
342,029 |
|
$ |
357,592 |
|
$ |
699,621 |
|
$ |
287,812 |
|
$ |
385,947 |
|
$ |
673,759 |
|
$ |
293,975 |
|
$ |
446,865 |
|
$ |
740,840 |
Sales channels: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service provider (2) |
|
$ |
1,127 |
|
$ |
106,766 |
|
$ |
107,893 |
|
$ |
977 |
|
$ |
139,202 |
|
$ |
140,179 |
|
$ |
579 |
|
$ |
151,697 |
|
$ |
152,276 |
Non-service provider |
|
|
340,902 |
|
|
250,826 |
|
|
591,728 |
|
|
286,835 |
|
|
246,745 |
|
|
533,580 |
|
|
293,396 |
|
|
295,168 |
|
|
588,564 |
Total |
|
$ |
342,029 |
|
$ |
357,592 |
|
$ |
699,621 |
|
$ |
287,812 |
|
$ |
385,947 |
|
$ |
673,759 |
|
$ |
293,975 |
|
$ |
446,865 |
|
$ |
740,840 |
_____________________________
(1) No individual foreign country represented more than 10% of the Company’s total net revenue in the periods presented.
(2) Service provider net revenue in Consumer Segment included cable net revenue from retail channels. Prior-period amounts have been recast to conform to the current-period presentation.
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 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.