A network adapter for handling packet reordering receives a set of packets. The network adapter is configured to aggregate a subset of in-sequence packets from the set of packets into at least one segment before passing the at least one segment from the network adapter to a next layer in a protocol stack. An in-sequence packet from the set of packets is stored into a first segment. Responsive to receiving an out of sequence packet in the set of packets, the out of sequence packet is stored in a second segment. An adaptive timeout timer is activated responsive to receiving the out of sequence packet, and the first segment is held at the network adapter while the adaptive timeout timer runs. Prior to the adaptive timeout timer expiring, a missing packet is received and included in the first segment. The network adapter sends the first segment to the next layer.