What: Shares of Netgear (NASDAQ:NTGR) skyrocketed 41.9% in the month of October, according to S&P Capital IQ data, primarily driven by the networking hardware company's stellar third-quarter 2015 report. After trailing the broader market for much of 2015 so far, this pop propelled Netgear's year-to-date returns well into positive territory:

NTGR Chart

NTGR data by YCharts.

So what: But that's not to say Netgear's results looked impressive on the surface. Quarterly revenue fell 3.2% year over year to $341.9 million. Meanwhile, adjusted operating margin fell 30 basis points to 10.3%, and adjusted net income dropped 17.2% to $21.7 million. Thanks to share repurchases over the past year, adjusted earnings per share declined at a lower clip, down 6.9% to $0.67.

Keep in mind, however, Netgear's own guidance called for significantly lower revenue of $315 million to $330 million and adjusted operating margin of just 8.5% to 9.5%.

According to Netgear, this relative outperformance was largely the result of strength in its retail business during the crucial back-to-school season, driven by healthy demand for both its new Arlo wireless security camera products, and its high-performance (and higher-margin) Nighthawk routers and switches. As a result, retail revenue grew increased 24.9% year over year to $164.1 million.

Meanwhile, though commercial revenue dropped 9.4% to $65.2 million, that also represented a slight sequential increase over the prior quarter for the segment. This momentum, management noted, should continue going forward. In addition, Netgear showed progress managing its recently restructured service provider business with a primary focus on profitability, and service provider sales continued to normalize toward the $100 million annual run rate management promised earlier this year.

Now what: Netgear also provided guidance for current-quarter revenue above expectations, and CEO Patrick Lo rightly expressed excitement for the retail segment's performance in the upcoming holiday season. To be sure, if Netgear's previously struggling segments continue to show improvement and Arlo and Nighthawk simultaneously drive up average selling prices for the core retail segment, I think investors should be equally excited for what's to come from this promising small-cap company.