NetScout six-month net income rises to $56.2M

The DDoS business is expected to contribute approximately $20 million in incremental annualized revenue; 2.0 million shares were repurchased.

Available on EDGAR 11/05/2026 - 04:38 PM EST Accepted by SEC EDGAR 11/05/2026 - 04:38 PM EST Learn about SEC filing dates

Rhea-AI Filing Summary

NETSCOUT SYSTEMS, INC. (NTCT) reported six-month revenue of $432.6 million for the period ended September 30, 2026, compared with $405.8 million a year earlier, and net income of $56.2 million versus $22.1 million. Gross profit percentage remained 79%. In the quarter, revenue was $222.2 million versus $219.0 million, and net income was $34.4 million versus $25.8 million.

On May 1, 2026, NetScout acquired the assets and certain liabilities comprising DigiCert, Inc.’s DDoS protection business for $55.0 million cash at closing. The business is expected to contribute approximately $20 million in incremental annualized revenue; through September 30, 2026, it had not contributed material revenue or net income. Net cash provided by operations for the six months was $35.6 million, compared with $80.2 million.

At September 30, 2026, cash, cash equivalents, marketable securities and investments totaled $571.3 million, compared with $705.1 million at March 31, 2026. NetScout repurchased 2.0 million shares for $77.0 million during the six months, with approximately 18.5 million shares remaining available under the program. It had $600 million available under its revolving credit facility based on covenant levels.

3 points · 0 major

PositiveiHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 1 point

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointSix-month revenue: $432.6 million, up 7% year over year.
• Moderate pointSix-month net income: $56.2 million, versus $22.1 million a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.DigiCert DDoS business: approximately $20 million incremental annualized revenue expected.

Negative

• Moderate pointSix-month operating cash flow: $35.6 million, versus $80.2 million a year earlier.

Key Figures

Revenue: $432.6 million Net income: $56.2 million Net cash provided by operating activities: $35.6 million +5 more

8 metrics

Revenue $432.6 million Six months ended September 30, 2026; $405.8 million in the comparable 2025 period

Net income $56.2 million Six months ended September 30, 2026; $22.1 million in the comparable 2025 period

Net cash provided by operating activities $35.6 million Six months ended September 30, 2026; $80.2 million in the comparable 2025 period

Gross profit percentage 79% Six months ended September 30, 2026; also 79% in the comparable 2025 period

DigiCert DDoS business acquisition $55.0 million cash consideration Paid at closing on May 1, 2026

Expected incremental annualized revenue Approximately $20 million Expected contribution from the DigiCert DDoS business acquisition

Share repurchases 2.0 million shares for $77.0 million Six months ended September 30, 2026

Cash, cash equivalents, marketable securities and investments $571.3 million At September 30, 2026; $705.1 million at March 31, 2026

Key Terms

performance obligations, Level 3 fair value measurement, consolidated net leverage ratio, deferred revenue, +1 more

5 terms

performance obligations financial

"allocated to undelivered performance obligations"

Performance obligations are the specific promises a company makes to deliver goods or services to a customer under a contract, treated as separate deliverables when a customer can benefit from them on their own. Investors care because these promises determine when and how much revenue a company records — like breaking a bundled purchase into separate billable parts — which affects reported earnings, growth trends and the clarity of future cash flows.

Level 3 fair value measurement financial

"represents a Level 3 fair value measurement"

consolidated net leverage ratio financial

"maximum consolidated net leverage ratio is 4.00 to 1.00"

The consolidated net leverage ratio measures how much debt a company carries compared with the cash it generates from core operations, calculated by taking total borrowings minus cash and dividing by annual operating profit. Like comparing a household’s mortgage balance to its yearly income, it tells investors how many years of operating profit would be needed to pay off net debt and thus gauges financial risk, flexibility to invest, and capacity to weather downturns.

deferred revenue financial

"recognized revenue related to the Company's deferred revenue balance"

Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.

cash flow hedging relationships financial

"Derivatives in Cash Flow Hedging Relationships"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were NTCT’s revenue and net income for the six months ended September 30, 2026?

NTCT reported revenue of $432.6 million and net income of $56.2 million for the six months ended September 30, 2026. For the comparable six months of 2025, revenue was $405.8 million and net income was $22.1 million.

What did NTCT acquire from DigiCert?

NetScout acquired the assets and certain liabilities comprising DigiCert, Inc.’s DDoS protection business on May 1, 2026, for $55.0 million in cash at closing. It expects approximately $20 million in incremental annualized revenue from the acquisition; through September 30, 2026, the acquired assets had not contributed material revenue or net income.

How much cash and marketable securities did NTCT have?

At September 30, 2026, NetScout had $571.3 million in cash, cash equivalents, marketable securities and investments, compared with $705.1 million at March 31, 2026. It also had $600 million available under its revolving credit facility based on covenant levels.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 000-26251

NETSCOUT SYSTEMS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		04-2837575
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

310 Littleton Road, Westford, MA 01886

(978) 614-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered:
Common Stock, $0.001 par value per share	NTCT	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer	☒	Accelerated filer	☐
	Non-accelerated filer	☐	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's common stock, par value $0.001 per share, as of October 27, 2026 was 71,067,586.

Table of Contents

NETSCOUT SYSTEMS, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2026

TABLE OF CONTENTS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		1
PART I: FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements:
	Consolidated Balance Sheets: At September 30, 2026 and March 31, 2026	2
	Consolidated Statements of Operations: For the three and six months ended September 30, 2026 and 2025	3
	Consolidated Statements of Comprehensive Income: For the three and six months ended September 30, 2026 and 2025	4
	Consolidated Statements of Stockholders' Equity: For the three and six months ended September 30, 2026 and 2025	5
	Consolidated Statements of Cash Flows: For the six months ended September 30, 2026 and 2025	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	35
Item 6.	Exhibits	36
SIGNATURES		37

Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to "NetScout," the "Company," "we," "us," and "our" refer to NetScout Systems, Inc. and, where appropriate, our consolidated subsidiaries.

NetScout, the NetScout logo, Adaptive Service Intelligence and other trademarks or service marks of NetScout appearing in this Quarterly Report are the property of NetScout Systems, Inc. and/or its subsidiaries and/or affiliates in the United States and/or other countries. Any third-party trade names, trademarks and service marks appearing in this Quarterly Report are the property of their respective holders.

Table of Contents

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and other parts of this Quarterly Report contain forward-looking statements under Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. These forward-looking statements involve risks and uncertainties. Examples of forward-looking statements include statements that relate to future events or our future financial performance or liquidity, and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words such as "may," "will," "could," "should," "expects," "plans," "intends," "seeks," "anticipates," "believes," "estimates," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on these forward-looking statements. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for our fiscal year ended March 31, 2026, filed with the Securities and Exchange Commission (SEC) on May 14, 2026, and elsewhere in this Quarterly Report. These factors may cause our actual results to differ materially from any forward-looking statement. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

1

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

NetScout Systems, Inc.

Consolidated Balance Sheets

(In thousands, except for share data)

(Unaudited)

		September 30, 2026				March 31, 2026
Assets
Current assets:
Cash and cash equivalents		$	438,356			$	586,499
Marketable securities			78,367				81,458
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $70 and $129 at September 30, 2026 and March 31, 2026, respectively			137,314				151,473
Inventories and deferred costs			30,004				13,321
Prepaid income taxes			17,454				6,159
Prepaid expenses and other current assets			28,312				28,972
Total current assets			729,807				867,882
Fixed assets, net			27,269				23,558
Operating lease right-of-use assets			32,263				35,553
Goodwill			1,096,394				1,070,592
Intangible assets, net			215,362				214,295
Deferred income taxes			103,920				93,735
Long-term marketable securities			54,549				37,188
Other assets			16,364				11,714
Total assets		$	2,275,928			$	2,354,517
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	23,515			$	23,492
Accrued compensation			66,240				84,515
Accrued other			15,301				20,012
Income taxes payable			805				1,655
Deferred revenue and customer deposits			306,108				330,601
Current portion of operating lease liabilities			10,764				9,874
Total current liabilities			422,733				470,149
Other long-term liabilities			6,302				6,568
Deferred tax liability			2,194				2,225
Accrued long-term retirement benefits			27,865				28,336
Long-term deferred revenue and customer deposits			154,568				168,261
Operating lease liabilities, net of current portion			25,277				29,718
Total liabilities			638,939				705,257
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.001 par value: 5,000,000 authorized; none issued or outstanding			—				—
Common stock, $0.001 par value: 300,000,000 authorized; 138,875,427 and 136,628,693 issued and 71,040,964 and 71,464,664 outstanding			139				136
Additional paid-in capital			3,362,375				3,325,400
Accumulated other comprehensive income			3,193				4,032
Treasury stock at cost, 67,834,463 and 65,164,029			(1,836,023	)			(1,731,396	)
Retained earnings			107,305				51,088
Total stockholders’ equity			1,636,989				1,649,260
Total liabilities and stockholders’ equity		$	2,275,928			$	2,354,517

The accompanying notes are an integral part of these consolidated financial statements.

2

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Operations

(In thousands, except for per share data)

(Unaudited)

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026				2025
Revenue:
Product		$	89,875			$	94,712			$	175,881			$	167,705
Service			132,310				124,305				256,727				238,059
Total revenue			222,185				219,017				432,608				405,764
Cost of revenue:
Product			11,137				11,597				20,809				23,522
Service			34,398				32,013				69,216				63,510
Total cost of revenue			45,535				43,610				90,025				87,032
Gross profit			176,650				175,407				342,583				318,732
Operating expenses:
Research and development			38,968				40,269				81,322				80,058
Sales and marketing			64,776				64,925				137,526				135,520
General and administrative			24,692				26,261				50,408				54,118
Amortization of acquired intangible assets			10,596				11,162				21,206				22,281
Restructuring charges			26				304				51				833
Total operating expenses			139,058				142,921				290,513				292,810
Income from operations			37,592				32,486				52,070				25,922
Interest and other income, net:
Interest income			4,138				3,530				8,466				6,741
Interest expense			(422	)			(421	)			(853	)			(836	)
Other expense, net			(632	)			(4,213	)			(49	)			(3,273	)
Total interest and other income (expense), net			3,084				(1,104	)			7,564				2,632
Income before income tax expense			40,676				31,382				59,634				28,554
Income tax expense			6,294				5,554				3,417				6,405
Net income		$	34,382			$	25,828			$	56,217			$	22,149
Basic net income per share		$	0.48			$	0.36			$	0.78			$	0.31
Diluted net income per share		$	0.47			$	0.35			$	0.76			$	0.30
Weighted average common shares outstanding used in computing:
Net income per share - basic			72,096				72,077				71,955				71,904
Net income per share - diluted			73,937				72,917				74,234				73,130

The accompanying notes are an integral part of these consolidated financial statements.

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NetScout Systems, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026				2025
Net income		$	34,382			$	25,828			$	56,217			$	22,149
Other comprehensive income (loss):
Cumulative translation adjustments			35				(147	)			80				(4	)
Changes in market value of investments:
Changes in unrealized (losses) gains, net of related tax effects			(479	)			14				(608	)			13
Total net change in market value of investments			(479	)			14				(608	)			13
Changes in market value of derivatives:
Changes in market value of derivatives, net of related tax effects			(319	)			(139	)			(435	)			114
Reclassification adjustment for net gains (losses) included in net income, net of related tax effects			63				(111	)			124				(242	)
Total net change in market value of derivatives			(256	)			(250	)			(311	)			(128	)
Other comprehensive loss			(700	)			(383	)			(839	)			(119	)
Comprehensive income		$	33,682			$	25,445			$	55,378			$	22,030

The accompanying notes are an integral part of these consolidated financial statements.

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NetScout Systems, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands, except for per share data)

(Unaudited)

	Three Months Ended September 30, 2026
	Common stock								Additional Paid				Accumulated Other Comprehensive				Treasury stock								Retained				Total Stockholders’
	Shares				Par Value				In Capital				Income				Shares				Stated Value				Earnings				Equity
Balance, June 30, 2026		138,474,142			$	138			$	3,342,802			$	3,893				65,773,692			$	(1,756,732	)		$	72,923			$	1,663,024
Net income																										34,382				34,382
Unrealized net investment losses														(479	)															(479	)
Unrealized net losses on derivative financial instruments														(256	)															(256	)
Cumulative translation adjustments														35																35
Issuance of common stock pursuant to vesting of restricted stock units		243,065				—																								—
Stock-based compensation expense for restricted stock units granted to employees										13,430																				13,430
Issuance of common stock under employee stock purchase plan		158,220				1				6,143																				6,144
Shares withheld for employee taxes related to equity awards																		60,771				(2,317	)							(2,317	)
Repurchase of treasury stock																		2,000,000				(76,974	)							(76,974	)
Balance, September 30, 2026		138,875,427			$	139			$	3,362,375			$	3,193				67,834,463			$	(1,836,023	)		$	107,305			$	1,636,989

	Six Months Ended September 30, 2026
	Common stock								Additional Paid				Accumulated Other Comprehensive				Treasury stock								Retained				Total Stockholders’
	Shares				Par Value				In Capital				Income				Shares				Stated Value				Earnings				Equity
Balance, March 31, 2026		136,628,693			$	136			$	3,325,400			$	4,032				65,164,029			$	(1,731,396	)		$	51,088			$	1,649,260
Net income																										56,217				56,217
Unrealized net investment losses														(608	)															(608	)
Unrealized net losses on derivative financial instruments														(311	)															(311	)
Cumulative translation adjustments														80																80
Issuance of common stock pursuant to vesting of restricted stock units		2,088,514				2																								2
Stock-based compensation expense for restricted stock units granted to employees										30,832																				30,832
Issuance of common stock under employee stock purchase plan		158,220				1				6,143																				6,144
Shares withheld for employee taxes related to equity awards																		670,434				(27,653	)							(27,653	)
Repurchase of treasury stock																		2,000,000				(76,974	)							(76,974	)
Balance, September 30, 2026		138,875,427			$	139			$	3,362,375			$	3,193				67,834,463			$	(1,836,023	)		$	107,305			$	1,636,989

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	Three Months Ended September 30, 2025
	Common stock								Additional Paid				Accumulated Other Comprehensive				Treasury stock								Accumulated				Total Stockholders’
	Shares				Par Value				In Capital				Income				Shares				Stated Value				Deficit				Equity
Balance, June 30, 2025		135,857,091			$	135			$	3,274,682			$	4,337				63,336,389			$	(1,683,481	)		$	(48,122	)		$	1,547,551
Net income																										25,828				25,828
Unrealized net investment gains														14																14
Unrealized net losses on derivative financial instruments														(250	)															(250	)
Cumulative translation adjustments														(147	)															(147	)
Issuance of common stock pursuant to vesting of restricted stock units		250,801				1																								1
Stock-based compensation expense for restricted stock units granted to employees										13,150																				13,150
Issuance of common stock under employee stock purchase plan		216,457								5,388																				5,388
Shares withheld for employee taxes related to equity awards																		60,927				(1,431	)							(1,431	)
Repurchase of treasury stock																		740,981				(16,552	)							(16,552	)
Balance, September 30, 2025		136,324,349			$	136			$	3,293,220			$	3,954				64,138,297			$	(1,701,464	)		$	(22,294	)		$	1,573,552

	Six Months Ended September 30, 2025
	Common stock Voting								Additional Paid				Accumulated Other Comprehensive				Treasury stock								Accumulated				Total Stockholders’
	Shares				Par Value				In Capital				Income				Shares				Stated Value				Deficit				Equity
Balance, March 31, 2025		134,038,262			$	134			$	3,255,333			$	4,073				61,978,025			$	(1,654,702	)		$	(44,443	)		$	1,560,395
Net income																										22,149				22,149
Unrealized net investment gains														13																13
Unrealized net losses on derivative financial instruments														(128	)															(128	)
Cumulative translation adjustments														(4	)															(4	)
Issuance of common stock pursuant to vesting of restricted stock units		2,069,630				2																								2
Stock-based compensation expense for restricted stock units granted to employees										32,499																				32,499
Issuance of common stock under employee stock purchase plan		216,457								5,388																				5,388
Shares withheld for employee taxes related to equity awards																		658,042				(15,197	)							(15,197	)
Repurchase of treasury stock																		1,502,230				(31,565	)							(31,565	)
Balance, September 30, 2025		136,324,349			$	136			$	3,293,220			$	3,954				64,138,297			$	(1,701,464	)		$	(22,294	)		$	1,573,552

The accompanying notes are an integral part of these consolidated financial statements.

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NetScout Systems, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

		Six Months Ended
		September 30,
		2026				2025
Cash flows from operating activities:
Net income		$	56,217			$	22,149
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			29,466				28,811
Operating lease right-of-use asset			5,155				5,004
Loss on disposal of fixed assets			27				5
Accretion of discounts on marketable securities			(978	)			—
Share-based compensation expense			31,830				33,516
Deferred income taxes			(8,698	)			(12,514	)
Gain on equity investment			—				1,008
Unrealized foreign exchange losses			182				—
Realized losses on derivatives			15				—
Changes in assets and liabilities
Accounts receivable and unbilled costs			21,657				33,838
Inventories and deferred costs			(13,634	)			32
Prepaid expenses and other assets			(9,484	)			(3,505	)
Accounts payable			(6,378	)			(3,455	)
Accrued compensation and other expenses			(20,176	)			2,084
Operating lease liabilities			(5,415	)			(5,626	)
Income taxes payable			(927	)			558
Deferred revenue			(43,230	)			(21,699	)
Net cash provided by operating activities			35,629				80,206
Cash flows from investing activities:
Purchase of marketable securities and investments			(60,310	)			(50,589	)
Proceeds from sales and maturities of marketable securities			46,250				30,362
Purchase of fixed assets			(4,133	)			(4,111	)
Proceeds from sale of equity investment			—				11,772
Acquisition of business			(55,000	)			—
Capitalized software development costs			(4,964	)			—
Net cash used in investing activities			(78,157	)			(12,566	)
Cash flows from financing activities:
Issuance of common stock under stock plans			3				2
Treasury stock repurchases			(76,974	)			(31,565	)
Tax withholdings on restricted stock units			(27,653	)			(15,197	)
Net cash used in financing activities			(104,624	)			(46,760	)
Effect of exchange rate changes on cash and cash equivalents			(991	)			5,085
Net (decrease) increase in cash and cash equivalents			(148,143	)			25,965
Cash and cash equivalents, beginning of period			586,499				457,415
Cash and cash equivalents, end of period		$	438,356			$	483,380
Supplemental disclosures:
Cash paid for income taxes		$	24,302			$	20,047
Non-cash transactions:
Transfers of inventory to fixed assets		$	1,366			$	613
Additions to property, plant and equipment included in accounts payable		$	1,260			$	68
Additions to inventory in accounts payable		$	4,438			$	—
Stock-based compensation included in fixed assets and other assets		$	1,011			$	—
Issuance of common stock under employee stock purchase plan		$	6,143			$	5,388

The accompanying notes are an integral part of these consolidated financial statements.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc. (NetScout or the Company). Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position and stockholders' equity, results of operations and cash flows. The year-end consolidated balance sheet data and statement of stockholders' equity were derived from the Company's audited financial statements, but do not include all disclosures required by GAAP. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation.

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026 filed with the SEC on May 14, 2026.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies disclosed in Note 2 - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Recently Adopted Accounting Standard

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, during the first quarter of the fiscal year ending March 31, 2027. This ASU allows companies to elect a practical expedient to simplify the measurement of credit losses for certain receivables and contract assets. The Company elected to apply the practical expedient prospectively. The adoption of this ASU had no impact on the Company’s consolidated financial statements.

Accounting Standards Issued and Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which include purchases of inventory, employee compensation, depreciation, and intangible asset amortization that are included on the face of the statements of income. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 is effective for the Company beginning with its fiscal year ending March 31, 2028. The Company is in the process of evaluating the impact that the adoption of ASU 2024-03 will have on its disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles (Subtopic 350-40): Update to modernize the accounting for internal-use software costs. ASU 2025-06 removes all references to software project development stages and clarifies the recognition threshold that entities must meet to begin capitalizing costs. ASU 2025-06 is effective for the Company beginning with its fiscal year ending March 31, 2029. The Company is currently evaluating the impact of this standard and does not expect the adoption of ASU 2025-06 to have a material impact on its consolidated financial statements and disclosures.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 2 – BUSINESS COMBINATION

DigiCert DDoS Protection Business Acquisition

On May 1, 2026, the Company acquired the assets and certain liabilities comprising DigiCert, Inc.'s distributed denial-of-service ("DDoS") protection business pursuant to an Asset Purchase Agreement (the "Acquisition").

The aggregate purchase price was $55.0 million, which consisted of $55.0 million cash consideration paid at closing. The results of operations of the acquired business have been included in the Company's consolidated financial statements from May 1, 2026.

The acquisition has been accounted for as a business combination under Accounting Standards Codification 805, Business Combinations. Goodwill and intangible assets recorded as part of the acquisition are deductible for tax purposes. The Company determined that the results of operations related to the DDoS business are not material. As such, the pro forma information is not required for the period ended September 30, 2026. The following table summarizes the preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date (in thousands):

Accounts receivable	$	7,539
Prepaid expenses and other current assets		484
Deferred tax assets		1,200
Operating lease right-of-use assets		1,461
Property and equipment		3,115
Customer relationships intangible asset		24,300
Total assets acquired	$	38,099
Accounts payable	$	(512	)
Deferred revenue		(4,988	)
Current portion of operating lease liabilities		(1,181	)
Other current liabilities		(681	)
Long-term deferred revenue		(135	)
Operating lease liabilities, net of current portion		(280	)
Total liabilities assumed		(7,777	)
Net identifiable assets acquired		30,322
Goodwill		24,678
Total purchase price	$	55,000

The fair value of the intangible asset was based on a valuation using an income approach. The underlying assumptions include the estimated cash flows to be generated by the existing customer relationships. This fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 fair value measurement. Customer relationship intangible assets are subject to amortization and will be amortized on a straight-line basis over an estimated useful life of 15 years, representing the period over which the Company expects to benefit from the acquired customer relationships.

From the acquisition date through September 30, 2026, the acquired assets did not contribute material revenue or net income to the Company's consolidated results of operations.

NOTE 3 – REVENUE

Deferred Revenue

During the six months ended September 30, 2026, the Company recognized revenue of $199.1 million related to the Company's deferred revenue balance reported at March 31, 2026.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Performance Obligations

The Company did not have any material variable consideration such as obligations for returns, refunds or warranties at September 30, 2026.

At September 30, 2026, the Company had total deferred revenue and customer deposits of $460.7 million, which represents the aggregate total contract price allocated to undelivered performance obligations. The Company expects to recognize $306.1 million, or 66%, of this revenue during the next 12 months, and expects to recognize the remaining $154.6 million, or 34%, of this revenue thereafter.

The Company did not have material significant financing components, or variable consideration or performance obligations satisfied in a prior period recognized during the six months ended September 30, 2026.

Costs to Obtain Contracts

At September 30, 2026, the consolidated balance sheet included $11.6 million in assets related to sales commissions to be expensed in future periods. A balance of $6.3 million was included in prepaid expenses and other current assets, and a balance of $5.3 million was included in other assets in the Company's consolidated balance sheet at September 30, 2026. At March 31, 2026, the consolidated balance sheet included $10.9 million in assets related to sales commissions to be expensed in future periods. A balance of $6.0 million was included in prepaid expenses and other current assets, and a balance of $4.9 million was included in other assets in the Company's consolidated balance sheet at March 31, 2026.

During each of the three and six months ended September 30, 2026 and 2025, the Company recognized $2.1 million, $1.8 million, $4.3 million, and $3.7 million of amortization related to this sales commission asset, respectively, which is included in the sales and marketing expense line in the Company's consolidated statements of operations.

Allowance for Credit Losses

The Company continually monitors collections from its customers. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for credit losses based on a combination of factors, including, but not limited to, analysis of the aging schedules, past due balances, historical collection experience and prevailing economic conditions.

The following table summarizes the activity in the allowance for credit losses (in thousands):

Balance at March 31, 2026	$	129
Additions resulting in charges to operations		3
Recoveries to other accounts		(62	)
Balance at September 30, 2026	$	70

NOTE 4 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of marketable securities and investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, marketable securities and investments are placed with financial institutions with high credit standing.

At September 30, 2026, one direct customer and no channel partners accounted for 10% or more of the accounts receivable balance. At March 31, 2026, one channel partner and no direct customers accounted for more than 10% of the accounts receivable balance.

During the three and six months ended September 30, 2026, no direct customers and no channel partners accounted for 10% or more of the Company's total revenue.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

During the three months ended September 30, 2025, one channel partner who primarily serves U.S. Government agencies accounted for more than 10% of the Company's total revenue, while no direct customers accounted for more than 10% of total revenue. During the six months ended September 30, 2025, the Company had no direct customers or channel partners that accounted for more than 10% of total revenue.

Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations, nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company's assumptions are incorrect, there could be an adverse impact on its allowance for credit losses.

NOTE 5 – SHARE-BASED COMPENSATION

On September 9, 2026, the Company's stockholders approved an amendment of the NetScout Systems, Inc. 2019 Equity Incentive Plan (the “Amended 2019 Plan”) to further increase the number of shares reserved for issuance by 3,500,000 from 31,294,651 shares to 34,794,651 shares. As of September 30, 2026, an aggregate of 9,628,261 shares remained available for grant under the Amended 2019 Plan.

On September 9, 2026, the Company's stockholders also approved an amendment of the NetScout Systems, Inc. Amended and Restated 2011 Employee Stock Purchase Plan (the “ESPP”) to increase the maximum number of shares of our common stock that may be issued under the ESPP by 4,000,000 from 7,500,000 shares to 11,500,000 shares. During the six months ended September 30, 2026, 158,220 shares were purchased under the ESPP and the fair market value per share was $38.83.

The following is a summary of share-based compensation expense including restricted stock units and performance-based restricted stock units granted pursuant to the Company's Amended 2019 Plan, and employee stock purchases made under the ESPP, based on estimated fair values within the applicable cost and expense lines identified below (in thousands):

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026					2025
Cost of product revenue		$	290			$	297			$	693				$	710
Cost of service revenue			2,009				1,930				4,723					4,677
Research and development			3,863				3,990				9,173					9,522
Sales and marketing			4,715				4,672				10,953					11,562
General and administrative			2,992				2,668				6,288					7,045
		$	13,869			$	13,557			$	31,830				$	33,516

NOTE 6 – CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES AND INVESTMENTS

Cash and cash equivalents mainly consisted of U.S. government and municipal obligations, commercial paper, agency bonds, money market instruments and cash maintained with various financial institutions at September 30, 2026 and March 31, 2026.

Marketable Securities

The following is a summary of marketable securities held by the Company at September 30, 2026, classified as short-term and long-term (in thousands):

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

		Amortized Cost				Unrealized (Losses)				Fair Value
Type of security:
Commercial paper		$	28,023			$	—			$	28,023
U.S. government and municipal obligations			31,944				(91	)		$	31,853
Agency bonds			6,496				(17	)		$	6,479
Certificates of deposit			5,846				—			$	5,846
Corporate bonds			6,181				(15	)		$	6,166
Total short-term marketable securities			78,490				(123	)			78,367
Agency bonds			32,256				(664	)			31,592
U.S. government and municipal obligations			23,095				(138	)		$	22,957
Total long-term marketable securities			55,351				(802	)			54,549
Total marketable securities		$	133,841			$	(925	)		$	132,916

The following is a summary of marketable securities held by the Company at March 31, 2026, classified as short-term and long-term (in thousands):

		Amortized Cost				Unrealized (Losses)				Fair Value
Type of security:
Commercial paper		$	48,793			$	—			$	48,793
U.S. government and municipal obligations			12,050				(3	)			12,047
Agency bonds			8,413				(2	)			8,411
Corporate bonds			6,169				(10	)			6,159
Certificates of deposit			6,048				—				6,048
Total short-term marketable securities			81,473				(15	)			81,458
Agency bonds			33,254				(101	)			33,153
U.S. government and municipal obligations			4,045				(10	)			4,035
Total long-term marketable securities			37,299				(111	)			37,188
Total marketable securities		$	118,772			$	(126	)		$	118,646

Contractual maturities of the Company's marketable securities held at September 30, 2026 and March 31, 2026 were as follows (in thousands):

		September 30, 2026				March 31, 2026
Available-for-sale securities:
Due in 1 year or less		$	78,367			$	81,458
Due after 1 year through 5 years			54,549				37,188
		$	132,916			$	118,646

Investments

On August 4, 2025, the Company sold its entire equity investment in Napatech, receiving cash proceeds of $11.8 million. During the six months ended September 30, 2025, the Company recognized a $1.0 million loss on the Napatech equity investment, in other (expense) income, net.

NOTE 7 – FAIR VALUE MEASUREMENTS

The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant unobservable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2026 and March 31, 2026 (in thousands):

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

	Fair Value Measurements at
	September 30, 2026
	Level 1				Level 2				Level 3				Total
ASSETS:
Cash and cash equivalents	$	435,853			$	2,503			$	—			$	438,356
Agency bonds		38,071				—				—				38,071
Commercial paper		—				28,023				—				28,023
U.S. government and municipal obligations		54,810				—				—				54,810
Certificates of deposit		—				5,846				—				5,846
Corporate bonds		6,166				—				—				6,166
	$	534,900			$	36,372			$	—			$	571,272
LIABILITIES:
Derivative financial instruments	$	—			$	(659	)		$	—			$	(659	)
	$	—			$	(659	)		$	—			$	(659	)

	Fair Value Measurements at
	March 31, 2026
	Level 1				Level 2				Level 3				Total
ASSETS:
Cash and cash equivalents	$	531,929			$	54,570			$	—			$	586,499
Commercial paper		—				48,793				—				48,793
Agency bonds		41,564				—				—				41,564
U.S. government and municipal obligations		16,082				—				—				16,082
Corporate bonds		6,159				—				—				6,159
Certificates of deposit		—				6,048				—				6,048
Derivative financial instruments		—				22				—				22
	$	595,734			$	109,433			$	—			$	705,167
LIABILITIES:
Derivative financial instruments	$	—			$	(258	)		$	—			$	(258	)
	$	—			$	(258	)		$	—			$	(258	)

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments.

The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency.

The Company's Level 2 investments are classified as such because they are valued using observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets in markets that are not active.

NOTE 8 – INVENTORIES AND DEFERRED COSTS

Inventories consist of the following (in thousands):

		September 30, 2026				March 31, 2026
Raw materials		$	22,679			$	7,516
Work in process			203				—
Finished goods			5,427				4,035
Deferred costs			1,695				1,770
		$	30,004			$	13,321

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

At September 30, 2026 and March 31, 2026, the carrying amounts of goodwill were $1.1 billion.

The change in the carrying amount of goodwill for the six months ended September 30, 2026 is primarily due to the May 1, 2026 DigiCert DDoS protection business acquisition.

The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2026 as follows (in thousands):

Balance at March 31, 2026		$	1,070,592
Goodwill acquired during the period			24,678
Foreign currency translation impact			1,124
Balance at September 30, 2026		$	1,096,394

Intangible Assets

The net carrying amounts of intangible assets were $215.4 million and $214.3 million at September 30, 2026 and March 31, 2026, respectively.

Intangible assets include the following amortizable intangible assets at September 30, 2026 (in thousands):

	Cost				Accumulated Amortization				Net
Developed technology	$	249,692			$	(246,695	)		$	2,997
Customer relationships		792,894				(584,751	)			208,143
Distributor relationships		5,186				(4,595	)			591
Definite lived trade name		57,903				(54,408	)			3,495
Core technology		7,192				(7,192	)			—
Capitalized software		3,317				(3,317	)			—
Other		1,208				(1,072	)			136
	$	1,117,392			$	(902,030	)		$	215,362

Intangible assets include the following amortizable intangible assets at March 31, 2026 (in thousands):

	Cost				Accumulated Amortization				Net
Developed technology	$	250,068			$	(246,330	)		$	3,738
Customer relationships		769,934				(564,880	)			205,054
Distributor relationships		5,209				(4,457	)			752
Definite lived trademark and trade name		57,962				(53,356	)			4,606
Core technology		7,192				(7,192	)			—
Capitalized software		3,317				(3,317	)			—
Other		1,208				(1,063	)			145
	$	1,094,890			$	(880,595	)		$	214,295

Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses. Amortization included as cost of service revenue consists of customer relationships. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and six months ended September 30, 2026 and 2025 (in thousands):

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

	Three Months Ended								Six Months Ended
	September 30,								September 30,
	2026				2025				2026				2025
Amortization of intangible assets included as:
Cost of product revenue	$	452			$	632			$	903			$	1,262
Cost of service revenue		405				—				675				—
Operating expense		10,596				11,165				21,206				22,289
	$	11,453			$	11,797			$	22,784			$	23,551

The following is the expected future amortization expense at September 30, 2026 for the fiscal years ending March 31 (in thousands):

2027 (remaining six months)	$	22,887
2028		42,809
2029		33,382
2030		30,485
2031		24,883
Thereafter		60,916
	$	215,362

NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The notional amounts and fair values of derivative instruments used to manage foreign cash flow exposures in the consolidated balance sheets at September 30, 2026 and March 31, 2026 were as follows (in thousands):

		Notional Amounts (a)								Prepaid Expenses and Other Current Assets								Accrued Other
		September 30, 2026				March 31, 2026				September 30, 2026				March 31, 2026				September 30, 2026				March 31, 2026
Derivatives designated as hedging instruments:
Forward contracts		$	6,748			$	11,023			$	—			$	22			$	659			$	258
		$	6,748			$	11,023			$	—			$	22			$	659			$	258

(a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding.

The following table provides the effect foreign exchange forward contracts had on other comprehensive income and results of operations for the three months ended September 30, 2026 and 2025 (in thousands):

		Loss Recognized in OCI on Derivative (a)								Gain (Loss) Reclassified from Accumulated OCI into Income (b)
		September 30, 2026				September 30, 2025				Location		September 30, 2026				September 30, 2025
Forward contracts		$	(418	)		$	(182	)		Research and development		$	(32	)		$	11
										Sales and marketing			(50	)			(157	)
		$	(418	)		$	(182	)				$	(82	)		$	(146	)

(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates.

(b)The amount represents reclassification from other comprehensive income (loss) to earnings that occurs when the hedged item affects earnings.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

The following table provides the effect that foreign exchange forward contracts designated as hedging instruments had on other comprehensive income and results of operations for the six months ended September 30, 2026 and 2025 (in thousands):

Derivatives in Cash Flow Hedging Relationships		Gain (Loss) Recognized in OCI on Derivative (a)								Gain (Loss) Reclassified from Accumulated OCI into Income (b)
		September 30, 2026				September 30, 2025				Location		September 30, 2026				September 30, 2025
Forward contracts		$	(571	)		$	148			Research and development		$	(81	)		$	8
										Sales and marketing			(81	)			(325	)
		$	(571	)		$	148					$	(162	)		$	(317	)

NOTE 11 – LONG-TERM DEBT

On October 4, 2024, the Company entered into the Third Amended and Restated Credit Agreement, which provides for a $600.0 million senior secured revolving credit facility maturing on October 4, 2029. At September 30, 2026 and March 31, 2026, there were no amounts outstanding under the Third Amended and Restated Credit Agreement.

The Third Amended and Restated Credit Agreement requires the Company to maintain a certain consolidated net leverage ratio. The Company's consolidated net leverage ratio is the ratio of its Consolidated Total Debt minus the lesser of unrestricted cash and 125% of adjusted consolidated EBITDA compared to its adjusted consolidated EBITDA. The Company's maximum consolidated net leverage ratio is 4.00 to 1.00. These covenants and limitations are more fully described in the Third Amended and Restated Credit Agreement. At September 30, 2026, the Company was in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.

The Company had unamortized capitalized debt issuance costs, net of $2.2 million at September 30, 2026, which are being amortized over the life of the revolving credit facility. The unamortized capitalized debt issuance costs balance consisted of $0.7 million that was included in prepaid expenses and other current assets and $1.5 million that was included in other assets in the Company's consolidated balance sheet at September 30, 2026.

NOTE 12 – LEASES

The components of operating lease cost for the three and six months ended September 30, 2026 and 2025, respectively, were as follows (in thousands):

	Three Months Ended								Six Months Ended
	September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
Lease cost:
Lease cost under long-term operating leases	$	3,077			$	2,875			$	5,707			$	5,728
Lease cost under short-term operating leases		451				400				918				737
Variable lease cost under short-term and long-term operating leases		1,025				1,091				2,044				2,052
Total operating lease cost	$	4,553			$	4,366			$	8,669			$	8,517

The table below presents supplemental cash flow information related to leases during the six months ended September 30, 2026 and 2025 (in thousands):

	Six Months Ended
	September 30, 2026				September 30, 2025
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,940			$	5,449

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

At September 30, 2026 and March 31, 2026, the weighted average remaining lease term in years and weighted average discount rate were as follows:

	September 30, 2026				March 31, 2026
Weighted average remaining lease term in years - operating leases	3.66				4.18
Weighted average discount rate - operating leases		4.4	%			4.4	%

Future minimum payments under non-cancellable leases at September 30, 2026 are as follows (in thousands):

Year ending March 31:
2027 (remaining six months)	$	5,443
2028		11,021
2029		9,357
2030		8,014
2031		4,478
Thereafter		647
Total lease payments	$	38,960
Less imputed interest	$	(2,919	)
Present value of lease liabilities	$	36,041

NOTE 13 – COMMITMENTS AND CONTINGENCIES

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, none of the Company’s current legal proceedings and claims, if determined adversely and based on the information known to management as of the date of this Quarterly Report, is expected to have a material adverse effect on our financial condition, results of operations or cash flows.

NOTE 14 – TREASURY STOCK

During the six months ended September 30, 2026 and 2025, the Company repurchased 2.0 million shares and approximately 1.5 million shares for $77.0 million and $31.6 million, respectively, under the 2022 Share Repurchase Program. At September 30, 2026, approximately 18.5 million shares of common stock remained available to be purchased under the current share repurchase program.

In connection with the delivery of shares of the Company's common stock upon vesting of restricted stock units, the Company withheld 0.7 million shares and 0.7 million shares at a cost of $27.7 million and $15.2 million, respectively, related to minimum statutory tax withholding requirements during the six months ended September 30, 2026 and 2025, respectively. These withholding transactions do not fall under the share repurchase programs described above, and therefore do not reduce the number of shares that are available for repurchase under those programs.

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 15 – NET INCOME PER SHARE

Calculations of the basic and diluted net income per share and potential common shares are as follows (in thousands, except for per share data):

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026					2025
Numerator:
Net income		$	34,382			$	25,828			$	56,217			$	22,149
Denominator:
Denominator for basic net income per share - weighted average shares outstanding			72,096				72,077				71,955				71,904
Dilutive common equivalent shares:
Weighted average restricted stock units and performance-based restricted stock units			1,841				840			$	2,279				1,225
Denominator for diluted net income per share- weighted average shares outstanding			73,937				72,917				74,234				73,130
Net income per share:
Net income per share - basic		$	0.48			$	0.36			$	0.78			$	0.31
Net income per share - diluted		$	0.47			$	0.35			$	0.76			$	0.30

The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be anti-dilutive (in thousands):

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026					2025
Restricted stock units			156				1,558				931				2,844

NOTE 16 – INCOME TAXES

Generally, the Company's effective tax rate differs from the U.S. federal statutory income tax rate primarily due to foreign withholding taxes and U.S. taxation on foreign earnings, which are partially offset by research and development tax credits and the foreign derived intangible income deduction.

The Company's effective tax rates were 15.5% and 17.7% for the three months ended September 30, 2026 and 2025, respectively. The effective tax rate for the three months ended September 30, 2026 differed from the effective tax rate for the three months ended September 30, 2025, primarily related to an increase in the forecasted benefit of the foreign derived intangible income deduction, partially offset by an increase in state tax expense.

The Company's effective tax rates were 5.7% and 22.4% for the six months ended September 30, 2026 and 2025, respectively. The effective tax rate for the six months ended September 30, 2026 differed from the effective tax rate for the six months ended September 30, 2025, primarily related to an increase in the forecasted benefit of the foreign derived intangible income deduction, a significant benefit related to stock compensation expense, partially offset by an increase in state tax expense.

NOTE 17 – SEGMENT AND GEOGRAPHIC INFORMATION

The Company's operating segments are determined based on the units that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by the chief operating decision-maker (CODM). The Company's President and CEO is the CODM. Operating results are reviewed by the CODM at the consolidated entity level for the purpose of making resource allocation decisions and for evaluating financial performance, primarily by monitoring actual results

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NetScout Systems, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

compared to forecasted results as well as by reviewing year-over-year results. The Company's CODM evaluates company-wide performance and determines allocation of resources based on multiple performance measures, including but not limited to net income (loss).

The Company has determined it operates as a single operating segment and has one reportable segment which includes product and service revenue related to the sale of enterprise observability, carrier service assurance, cybersecurity, and DDoS protection solutions. The Company's results for the one reportable segment are the same as presented in the Company's consolidated statements of operations and there is no expense information that is supplemental to that disclosed in these consolidated financial statements, which are regularly provided to the CODM. The measure of segment assets is reported on the Company's consolidated balance sheet as total assets. Segment asset information is not used by the CODM to allocate resources.

The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. The Company's policies mandate compliance with economic sanctions and export controls.

Total revenue by geography is as follows (in thousands):

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2026				2025				2026				2025
United States		$	123,637			$	131,164			$	248,392			$	231,668
Europe			38,652				33,629				74,631				64,343
Asia			20,915				15,281				34,491				30,331
Rest of the world			38,981				38,943				75,094				79,422
		$	222,185			$	219,017			$	432,608			$	405,764

The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company's products to international locations. Further, the Company determines the geography of its sales after considering where the contract originated. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company's identifiable assets are located in the United States.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the Securities and Exchange Commission (SEC) on May 14, 2026 (Annual Report). This discussion contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in Part I, Item 1A "Risk Factors" in our Annual Report. These risks and uncertainties could cause actual results to differ significantly from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the section titled "Cautionary Statement Concerning Forward-Looking Statements" that appears at the beginning of this Quarterly Report. These statements, like all statements in this report, speak only as of the date of this Quarterly Report (unless another date is indicated), and, except as required by law, we undertake no obligation to update or revise these statements in light of future developments.

Overview

We are an industry leader with over four decades of experience in providing enterprise network observability, carrier service assurance, AI Ops, cybersecurity, and DDoS protection solutions. Our unique visibility platform and solutions are powered by our pioneering deep packet inspection, or DPI, technology at scale, which is used by many Fortune 500 companies to protect their digital business services against disruption. Service providers and enterprises, including local, state and federal government agencies, rely on our solutions to achieve the visibility and protection necessary to optimize network performance, ensure the delivery of high-quality, mission-critical applications and services, gain timely insight into the end-user experience, and protect their networks from attack. The majority of our solutions are designed to provide Smart Data, a high-fidelity, decision-grade data foundation derived from real-time network activity across legacy, hybrid, and cloud-native environments. This data is designed to enable a unified view of performance, availability, and security, support faster root-cause analysis and operational decision-making, and is increasingly used to inform broader observability platforms and automated and AI-driven workflows. With our offerings, customers can quickly, efficiently and effectively identify and resolve issues that result in downtime, service interruptions, poor service quality, or compromised data, thereby reducing mean time to resolution of issues and driving compelling returns on their investments in their networks and broader technology initiatives. Significant technology trends and catalysts for our business include the evolution of customers' digital transformation initiatives, such as migration to cloud environments and to the edges of their networks; the rapidly evolving cybersecurity threat landscape; advancements in AI and business analytics that can enhance observability and are increasing the need for high-quality, real-time data to support automated and AI-driven operations; and the continued evolution and potential opportunities related to 5G technology across both the service provider and enterprise customer verticals.

Our operating results are affected by a variety of factors, including customer demand, product and service mix, pricing, operating costs, competition, and our ability to successfully execute our growth and strategic initiatives. See Part I, Item 1A, “Risk Factors” in our Annual Report for additional information regarding factors that may affect our business and operating results.

On May 1, 2026, the Company acquired the assets and certain liabilities comprising DigiCert, Inc.'s DDoS protection business pursuant to an Asset Purchase Agreement (the "Acquisition"). The DigiCert DDoS protection business acquisition enhances the Company’s cybersecurity offerings and enables the integration of certain infrastructure of the Company’s Arbor Cloud network, while expanding its DDoS protection capabilities. The DigiCert DDoS protection business acquisition is expected to contribute approximately $20 million in incremental annualized revenue from the acquisition date, while providing the Company with greater control of the Arbor Cloud network and a clearer path to scaling cloud-based services over time.

Global and Macroeconomic Conditions

We continue to closely monitor current global and macroeconomic conditions, including the impacts of armed conflicts or warfare, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, international trade relations (including trade protection measures, such as tariffs and other trade barriers), and the risk of a recession, including the manner and extent to which they have impacted and could continue to impact our business, customers, employees, supply chain, and distribution network. In addition, our industry is experiencing AI-related supply-chain dynamics which could influence the timing and size of certain customer orders. The full extent of the impacts of these global and macroeconomic conditions remains dynamic. We remain optimistic but cognizant of ongoing macroeconomic dynamics and

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constrained customer spending in the service provider market and firmly focused on driving product innovation, sustaining annual revenue growth, and enhancing margins through continued disciplined cost management as we navigate the current macroeconomic landscape. As a result, we have continued our efforts to manage discretionary costs and align spending with the current environment while we continue to execute on our long-term strategic plans.

Though we continue to monitor the impacts of evolving global and macroeconomic conditions on our business, we expect net cash provided by operations combined with cash, cash equivalents, marketable securities and borrowing availability under our revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, and working capital requirements over at least the next twelve months. We continue to take actions to manage costs and increase productivity throughout our company, including managing discretionary spending and hiring activities, but are continuing to invest in areas that advance our business for the future. In addition to our cash equivalents, we had $600 million available under a revolving credit facility based on covenant levels at September 30, 2026.

Results Overview

Total revenue increased $26.8 million, or 7%, for the six months ended September 30, 2026, as compared to total revenue for the six months ended September 30, 2025, driven by an increase in service revenue and to a lesser extent product revenue. Growth was primarily driven by demand for service assurance offerings from enterprise customer channels. U.S. revenue increased 7% while international revenue increased 6%.

Our total gross profit percentage remained at 79% during the six months ended September 30, 2026, as compared with the six months ended September 30, 2025. Our total gross profit percentage benefited from product revenue growth and a more favorable product mix associated with increased licensing of our software products, offset primarily by increased service costs associated with our DigiCert DDoS protection business acquisition.

Net income for the six months ended September 30, 2026 was $56.2 million, as compared with net income for the six months ended September 30, 2025 of $22.1 million. The increase of $34.1 million in net income was primarily due to a $23.9 million increase in total gross profit, $6.3 million increase in capitalized software, $4.9 million increase in interest and other income, $3.2 million decrease in costs associated with trade shows and other events due to timing, $3.0 million decrease in income tax expenses, $2.8 million decrease in professional service costs, $1.2 million decrease in legal expenses, $1.0 million decrease in amortization of acquired intangibles, and $0.8 million decrease in restructuring charges, partially offset by $16.9 million increase in employee-related expenses primarily due to an increase in variable incentive compensation.

At September 30, 2026, we had cash, cash equivalents, marketable securities and investments (current and non-current) of $571.3 million. This represents a decrease of $133.9 million from $705.1 million at March 31, 2026. This decrease was primarily due to $77.0 million used for treasury stock repurchases, $60.3 million in purchases of marketable securities, $55.0 million used in the acquisition of the DDoS Protection Business of DigiCert, $27.7 million used for tax withholdings on restricted stock units, and $9.1 million used for fixed assets and capitalized software, partially offset by $35.6 million of net cash provided by operations, and $46.3 million in proceeds from the maturity of marketable securities during the six months ended September 30, 2026.

Use of Non-GAAP Financial Measures

To supplement the United States GAAP financial measures, we report in quarterly and annual earnings announcements, investor presentations and other investor communications by reporting the following non-GAAP measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, and adjusted EBITDA. Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets and share-based compensation expense from gross profit (GAAP). Non-GAAP income from operations includes the aforementioned adjustments related to non-GAAP gross profit and also removes executive transition costs, and restructuring charges from income from operations (GAAP). Non-GAAP operating margin is non-GAAP income from operations expressed as a percentage of revenue. Non-GAAP net income includes the foregoing adjustments related to non-GAAP income from operations and also removes the income tax effects of such adjustments as well as any loss on extinguishment of debt from net income (GAAP). Non-GAAP net income per diluted share is non-GAAP net income divided by total outstanding shares on a diluted basis. Adjusted EBITDA includes the aforementioned adjustments related to non-GAAP net income and also removes interest and other expense, income tax expense, and depreciation and amortization from net income (GAAP). Beginning in the third quarter of fiscal year 2026, we have renamed non-GAAP EBITDA

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from operations to adjusted EBITDA. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures included in the attached tables within this Quarterly Report.

Beginning with the three months ended September 30, 2026, we revised our definitions of non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, and adjusted EBITDA to no longer adjust for acquisition-related depreciation expense, as such amounts are not currently material. We may adjust for acquisition-related depreciation expense in future periods if such amounts become material. The change does not impact our financial position, cash flows, or GAAP consolidated results of operations. Prior-period non-GAAP financial measures presented have been recast to conform to the current presentation.

These non-GAAP measures are not prepared in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (gross profit, income from operations, operating margin, net income, and net income per diluted share), and may have limitations because they do not reflect all of our results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP. We believe these non-GAAP financial measures will enhance the reader’s overall understanding of our current financial performance and our prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how the Company plans and measures its own business. We believe that providing these non-GAAP measures affords investors a view of our operating results that may be more easily compared to peer companies and also enables investors to consider our operating results on both a GAAP and non-GAAP basis during and following the integration period of our acquisitions. Presenting the GAAP measures on their own, without the supplemental non-GAAP disclosures, might not be indicative of our core operating results. Furthermore, we believe that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures provides useful information to management and investors regarding present and future business trends relating to our financial condition and results of operations.

The following table reconciles gross profit, income (loss) from operations, net income (loss) and net income (loss) per share on a GAAP and non-GAAP basis for the three and six months ended September 30, 2026 and 2025, respectively (dollars in thousands, except for per share data):

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	Three months ended								Six Months Ended
	September 30,								September 30,
	2026				2025				2026				2025
Revenue	$	222,185			$	219,017			$	432,608			$	405,764
GAAP gross profit	$	176,650			$	175,407			$	342,583			$	318,732
Share-based compensation expense		2,297				2,227				5,416				5,387
Amortization of acquired intangible assets		777				551				1,419				1,101
Non-GAAP gross profit	$	179,724			$	178,185			$	349,418			$	325,220
GAAP income from operations	$	37,592			$	32,486			$	52,070			$	25,922
Share-based compensation expense		13,865				13,557				31,830				33,516
Amortization of acquired intangible assets		11,373				11,713				22,625				23,382
Restructuring charges		26				304				51				833
Executive transition costs		—				—				—				959
Non-GAAP income from operations	$	62,856			$	58,060			$	106,576			$	84,612
GAAP net income	$	34,382			$	25,828			$	56,217			$	22,149
Share-based compensation expense		13,865				13,557				31,830				33,516
Amortization of acquired intangible assets		11,373				11,713				22,625				23,382
Restructuring charges		26				304				51				833
Executive transition costs		—				—				—				959
Income tax adjustments		(6,894	)			(6,336	)			(19,411	)			(11,048	)
Non-GAAP net income	$	52,752			$	45,066			$	91,312			$	69,791
GAAP net income per share - diluted	$	0.47			$	0.35			$	0.76			$	0.30
Per share impact of non-GAAP adjustments identified above		0.24				0.27				0.47				0.65
Non-GAAP net income per share - diluted	$	0.71			$	0.62			$	1.23			$	0.95
GAAP net income	$	34,382			$	25,828			$	56,217			$	22,149
Previous adjustments to determine non-GAAP net income		18,370				19,238				35,095				47,642
Non-GAAP net income	$	52,752			$	45,066			$	91,312			$	69,791
Interest and other (income) expense, net non-GAAP		(3,084	)			1,104				(7,564	)			(2,632	)
Depreciation and amortization excluding amortization of acquired intangible assets		3,655				2,641				6,841				5,429
Income tax expense non-GAAP		13,188				11,890				22,828				17,453
Adjusted EBITDA	$	66,511			$	60,701			$	113,417			$	90,041

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

Our accounting policies for revenue recognition and the valuation of goodwill are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. There have been no significant changes to the above critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our annual consolidated financial statements and accompanying notes included in our Annual Report.

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Three Months Ended September 30, 2026 and 2025

Revenue

Total revenue for the three months ended September 30, 2026 increased 1% compared to the prior-year period, as growth in service revenue was largely offset by lower product revenue. Service revenue increased 6%, driven by continued expansion of cloud services, including the acquired assets of the DigiCert DDoS protection business, and to a lesser extent, the timing and composition of maintenance and contract renewals. Product revenue decreased 5%, primarily due to the timing of U.S. Federal Government orders. U.S. revenue decreased 6%, driven by lower product revenue, partially offset by growth in U.S. service revenue. International revenue increased 12%, benefiting from increased service provider demand. By product line, service assurance revenue decreased 1%, reflecting lower product revenue, while cybersecurity revenue increased 7%. From a customer-vertical perspective, service provider revenue increased 2%, with growth driven by product revenue. Enterprise revenue increased 1%, as growth in service revenue was largely offset by a decline in product revenue.

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Revenue:
Product	$	89,875				40	%		$	94,712				43	%		$	(4,837	)			(5	)%
Service		132,310				60	%			124,305				57	%			8,005				6	%
Total revenue	$	222,185				100	%		$	219,017				100	%		$	3,168				1	%

Total revenue by geography was as follows:

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
United States	$	123,637				56	%		$	131,164				60	%		$	(7,527	)			(6	)%
International:
Europe		38,652				17	%			33,629				15	%			5,023				15	%
Asia		20,915				9	%			15,281				7	%			5,634				37	%
Rest of the world		38,981				18	%			38,943				18	%			38				—	%
Subtotal international		98,548				44	%			87,853				40	%			10,695				12	%
Total revenue	$	222,185				100	%		$	219,017				100	%		$	3,168				1	%

Total revenue by product line was as follows:

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Revenue:
Service assurance	$	142,160				64	%		$	144,043				66	%		$	(1,883	)			(1	)%
Cybersecurity		80,025				36	%			74,974				34	%			5,051				7	%
Total revenue	$	222,185				100	%		$	219,017				100	%		$	3,168				1	%

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Total revenue by customer vertical was as follows:

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Revenue:
Service provider	$	86,458				39	%		$	84,514				39	%		$	1,944				2	%
Enterprise		135,727				61	%			134,503				61	%			1,224				1	%
Total revenue	$	222,185				100	%		$	219,017				100	%		$	3,168				1	%

Cost of Revenue and Gross Profit

Cost of product revenue consists primarily of material components, personnel expenses, packaging materials, overhead and amortization of acquired developed technology. Cost of service revenue consists primarily of personnel, material, overhead and support costs.

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Cost of revenue
Product	$	11,137				5	%		$	11,597				5	%		$	(460	)			(4	)%
Service		34,398				15	%			32,013				15	%			2,385				7	%
Total cost of revenue	$	45,535				20	%		$	43,610				20	%		$	1,925				4	%
Gross profit:
Product $	$	78,738				35	%		$	83,115				38	%		$	(4,377	)			(5	)%
Product gross profit %		88	%							88	%							—	%
Service $	$	97,912				44	%		$	92,292				42	%		$	5,620				6	%
Service gross profit %		74	%							74	%							—	%
Total gross profit $	$	176,650							$	175,407							$	1,243				1	%
Total gross profit %		80	%							80	%							—	%

Product. The 4%, or $0.5 million, decrease in cost of product revenue for the three months ended September 30, 2026 compared to the same period last year was primarily driven by the decrease in product revenue. Our product gross profit percentage was consistent at 88% during the three months ended September 30, 2026 as compared with the three months ended September 30, 2025.

Service. The 7%, or $2.4 million, increase in cost of service revenue for the three months ended September 30, 2026 compared to the same period last year was driven by a $1.8 million increase in personnel costs primarily from increased headcount from our DigiCert DDoS protection business acquisition. Our service gross profit percentage was consistent at 74% during the three months ended September 30, 2026 as compared with the three months ended September 30, 2025.

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Operating Expenses

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Research and development	$	38,968				18	%		$	40,269				18	%		$	(1,301	)			(3	)%
Sales and marketing		64,776				29	%			64,925				30	%			(149	)			—	%
General and administrative		24,692				11	%			26,261				12	%			(1,569	)			(6	)%
Amortization of acquired intangible assets		10,596				5	%			11,162				5	%			(566	)			(5	)%
Restructuring charges		26				—	%			304				—	%			(278	)			(91	)%
Total operating expenses	$	139,058				63	%		$	142,921				65	%		$	(3,863	)			(3	)%

Research and development. Research and development expenses consist primarily of personnel expenses, fees for outside consultants, overhead and related expenses associated with the development of new products and the enhancement of existing products.

The 3%, or $1.3 million, decrease in research and development expenses for the three months ended September 30, 2026 compared to the same period last year was primarily due to a $2.4 million increase in capitalized software development costs and a decrease in employee-related variable incentive compensation, partially offset by an increase of $2.0 million in personnel costs driven by increased headcount from our DigiCert DDoS protection business acquisition.

Sales and marketing. Sales and marketing expenses consist primarily of personnel expenses and commissions, overhead and other expenses associated with selling activities and marketing programs such as trade shows, seminars, advertising and new product launch activities.

The 0%, or $0.1 million, decrease in total sales and marketing expenses for the three months ended September 30, 2026 compared to the same period last year was primarily due to a $3.0 million decrease in costs associated with trade shows and other events due to timing, partially offset by an increase of $0.9 million in personnel costs and an increase in employee-related variable incentive compensation.

General and administrative. General and administrative expenses consist primarily of personnel expenses for executive, finance, legal and human resource employees, overhead and other corporate expenditures.

The 6%, or $1.6 million, decrease in general and administrative expenses for the three months ended September 30, 2026 compared to the same period last year was primarily due to a $0.7 million decrease in legal expenses, $0.6 million decrease in professional service costs, and a decrease in employee-related variable incentive compensation, partially offset by a $1.2 million increase in software license costs.

Interest and Other Income (Expense), Net. Interest and other income, net includes interest earned on our cash, cash equivalents and marketable securities, interest expense and other non-operating gains or losses.

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026								2025								Change
					% of Revenue								% of Revenue				$				%
Interest and other income (expense), net	$	3,084				1	%		$	(1,104	)			(1	)%		$	4,188				379	%

The $4.2 million, increase in interest and other income (expense), net, for the three months ended September 30, 2026 compared to the same period last year was primarily due to a $3.5 million decrease in the change in fair value of our prior equity investment in Napatech that was sold in August 2025.

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Income Tax Expense

	Three Months Ended
	September 30,
	(Dollars in Thousands)
	2026						2025						Change
					% of Revenue						% of Revenue		$				%
Income tax expense	$	6,294			3%		$	5,554			3%		$	740				13	%

The effective tax rates were 15.5% and 17.7% for the three months ended September 30, 2026 and 2025, respectively. The effective tax rate for the three months ended September 30, 2026 differed from the effective tax rate for the three months ended September 30, 2025, primarily related to an increase in the forecasted benefit of the foreign derived intangible income deduction , partially offset by an increase in state tax expense.

Six Months Ended September 30, 2026 and 2025

Revenue

Total revenue increased $26.8 million, or 7% for the six months ended September 30, 2026 compared to the six months ended September 30, 2025 driven by an increase in service revenue and to a lesser extent product revenue. Service revenue increased 8%, primarily due to the timing and composition of maintenance and contract renewals and continued expansion of cloud services. Product revenue increased by 5%, driven by improved enterprise demand for service assurance offerings, including increased orders from U.S. Government agencies. U.S. revenue grew 7%, benefiting from stronger enterprise demand, while international revenue increased 6%, benefiting from stronger service provider demand. By product line, service assurance revenue increased 8% driven by both product and service revenue and cybersecurity revenue increased 4%, as growth in cybersecurity service revenue more than offset lower cybersecurity product revenue. From a customer-vertical perspective, enterprise revenue increased 9%, driven by an increase in both product and service revenue, and service provider revenue increased 3%.

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Revenue:
Product	$	175,881				41	%	$	167,705				41	%		$	8,176				5	%
Service		256,727				59	%		238,059				59	%			18,668				8	%
Total revenue	$	432,608				100	%	$	405,764				100	%		$	26,844				7	%

Total revenue by geography was as follows:

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
United States	$	248,392				57	%	$	231,668				57	%		$	16,724				7	%
International:
Europe		74,631				17	%		64,343				16	%			10,288				16	%
Asia		34,491				8	%		30,331				7	%			4,160				14	%
Rest of the world		75,094				17	%		79,422				20	%			(4,328	)			(5	)%
Subtotal international		184,216				43	%		174,096				43	%			10,120				6	%
Total revenue	$	432,608				100	%	$	405,764				100	%		$	26,844				7	%

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Total revenue by product line was as follows:

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Revenue:
Service assurance	$	283,787				66	%	$	262,373				65	%		$	21,414				8	%
Cybersecurity		148,821				34	%		143,391				35	%			5,430				4	%
Total revenue	$	432,608				100	%	$	405,764				100	%		$	26,844				7	%

Total revenue by customer vertical was as follows:

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Revenue:
Service provider	$	164,901				38	%	$	160,483				40	%		$	4,418				3	%
Enterprise		267,707				62	%		245,281				60	%			22,426				9	%
Total revenue	$	432,608				100	%	$	405,764				100	%		$	26,844				7	%

Cost of Revenue and Gross Profit

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Cost of revenue
Product	$	20,809				5	%	$	23,522				6	%		$	(2,713	)			(12	)%
Service		69,216				16	%		63,510				16	%			5,706				9	%
Total cost of revenue	$	90,025				21	%	$	87,032				22	%		$	2,993				3	%
Gross profit:
Product $	$	155,072				36	%	$	144,183				36	%		$	10,889				8	%
Product gross profit %		88	%						86	%							2	%
Service $	$	187,511				43	%	$	174,549				43	%		$	12,962				7	%
Service gross profit %		73	%						73	%							—	%
Total gross profit $	$	342,583						$	318,732							$	23,851				7	%
Total gross profit %		79	%						79	%							—	%

Product. The 12%, or 2.7 million, decrease in cost of product revenue for the six months ended September 30, 2026 compared to the same period last year was primarily due to a more favorable product mix associated with increased licensing of our software products. Our product gross profit percentage increased two percentage points during the six months ended September 30, 2026 as compared with the six months ended September 30, 2025.

Service. The 9%, or $5.7 million, increase in cost of service revenue for the six months ended September 30, 2026 compared to the same period last year was driven by a $3.3 million increase in personnel costs primarily from increased headcount from our DigiCert DDoS protection business acquisition and an increase in employee-related variable incentive compensation. Our service

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gross profit percentage was consistent at 73% during the six months ended September 30, 2026 as compared with the six months ended September 30, 2025.

Operating Expenses

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Research and development	$	81,322				19	%	$	80,058				20	%		$	1,264				2	%
Sales and marketing		137,526				32	%		135,520				33	%			2,006				1	%
General and administrative		50,408				12	%		54,118				13	%			(3,710	)			(7	)%
Amortization of acquired intangible assets		21,206				5	%		22,281				5	%			(1,075	)			(5	)%
Restructuring charges		51				—	%		833				—	%			(782	)			(94	)%
Total operating expenses	$	290,513				68	%	$	292,810				71	%		$	(2,297	)			(1	)%

Research and development. The 2%, or $1.3 million, increase in research and development expenses for the six months ended September 30, 2026 compared to the same period last year was primarily due to an increase of $3.4 million in personnel costs driven by increased headcount from our DigiCert DDoS protection business acquisition and an increase in employee-related variable incentive compensation, partially offset by a $5.8 million increase in capitalized software development costs.

Sales and marketing. The 1%, or $2.0 million, increase in sales and marketing expenses for the six months ended September 30, 2026 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation and a $1.6 million increase in personnel costs partially offset by a $3.2 million decrease associated with the timing of trade shows and other events.

General and administrative. The 7%, or $3.7 million, decrease in general and administrative expenses for the six months ended September 30, 2026 compared to the same period last year was primarily due to a $0.8 million decrease in stock based compensation driven by the retirement of our former Chief Financial Officer and Chief Operating Officer, a $1.0 million decrease associated with the elimination of the costs associated with the previous one-year senior advisor roles of our former Chief Financial Officer and Chief Operating Officer, a $1.2 million decrease in legal expenses, a $1.1 million decrease in professional service costs, a $0.7 million decrease in audit fees, partially offset by a $1.6 million increase in software license costs and an increase in employee-related variable incentive compensation.

Interest and Other Income, Net

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Interest and other income (expense), net	$	7,564				2	%	$	2,632				1	%		$	4,932				187	%

The 187%, or $4.9 million, increase in interest and other income (expense), net, for the six months ended September 30, 2026 compared to the same period last year was primarily due to a $2.2 million decrease in foreign exchange expense, a $1.7 million increase in interest income, and a $1.0 million increase due to the absence of a loss recorded in the prior year period on our equity investment in Napatech, which was sold in August 2025.

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Income Tax Expense

	Six Months Ended
	September 30,
	(Dollars in Thousands)
	2026							2025								Change
					% of Revenue							% of Revenue				$				%
Income tax expense	$	3,417				1	%	$	6,405				2	%		$	(2,988	)			(47	)%

Our effective tax rates were 5.7% and 22.4% for the six months ended September 30, 2026 and 2025, respectively. The effective tax rate for the six months ended September 30, 2026 differed from the effective tax rate for the six months ended September 30, 2025, primarily related to an increase in the forecasted benefit of the foreign derived intangible income deduction, a significant benefit related to stock compensation expense, partially offset by an increase in state tax expense.

Backlog

We produce our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers. We configure our products to customer specifications and generally deliver products shortly after receipt of the purchase order. Service engagements are also included in certain orders. Customers generally may reschedule or cancel unfulfilled orders with little or no penalty. Our total backlog at any particular time is not necessarily indicative of future sales levels. Within total backlog, fulfillable backlog includes what we consider to represent orders that are generally available to be delivered to customers as of the end of the reporting period. Delivery of our fulfillable backlog typically occurs early in the subsequent quarter. However, delivery may be delayed or accelerated due to various other reasons, including but not limited to, changes in timing of customer projects and product delivery schedules, which may not be within our control. Our total combined product backlog at September 30, 2026 was $20.9 million compared to $50.8 million at March 31, 2026. Combined product backlog included fulfillable backlog of $15.4 million and $45.8 million at September 30, 2026 and March 31, 2026, respectively.

Liquidity and Capital Resources

Cash, cash equivalents, marketable securities and investments consisted of the following (in thousands):

	September 30, 2026				March 31, 2026
Cash and cash equivalents	$	438,356			$	586,499
Short-term marketable securities		78,367				81,458
Long-term marketable securities		54,549				37,188
Cash, cash equivalents and marketable securities	$	571,272			$	705,145

Cash, cash equivalents, marketable securities and investments

Cash and short-term investments held outside of the United States were approximately $199.6 million.

Cash and cash equivalents were impacted by the following:

	Six Months Ended
	September 30,
	(in thousands)
	2026				2025
Net cash provided by operating activities	$	35,629			$	80,206
Net cash used in investing activities	$	(78,157	)		$	(12,566	)
Net cash used in financing activities	$	(104,624	)		$	(46,760	)

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Net cash from operating activities

Net cash provided by operating activities of $35.6 million for the six months ended September 30, 2026, was primarily attributable to net income, as adjusted for share-based compensation expense, depreciation and amortization, deferred income taxes, operating lease right-of-use asset, accretion of discounts on marketable securities, and unrealized foreign exchange losses, partially offset by a $77.6 million net working capital outflow. The working capital outflow was primarily driven by a $43.2 million decrease in deferred revenue, a $20.2 million decrease in accrued compensation and other expenses, a $13.6 million increase in inventories and deferred costs, a $6.4 million decrease in accounts payable, a $9.5 million increase in prepaid expenses and other asset, a $5.4 million decrease in operating lease liabilities, offset by a $21.7 million decrease in accounts receivable and unbilled costs. Inventories and deferred costs increased primarily due to strategic purchases of components and raw materials intended to mitigate potential supply-chain constraints and cost increases and to support anticipated customer demand.

Net cash from investing activities

	Six Months Ended
	September 30,
	(in thousands)
	2026				2025
Cash used in investing activities included the following:
Purchase of marketable securities and investments	$	(60,310	)		$	(50,589	)
Proceeds from sales and maturity of marketable securities		46,250				30,362
Purchase of fixed assets		(4,133	)			(4,111	)
Proceeds from sale of equity investment		—				11,772
Acquisition of business		(55,000	)			—
Capitalized software development costs		(4,964	)			—
	$	(78,157	)		$	(12,566	)

Net cash used in investing activities increased by $65.6 million to $78.2 million during the six months ended September 30, 2026, compared with $12.6 million of net cash used in investing activities during the six months ended September 30, 2025. The increase in net cash used in investing activities was due to $55.0 million used in the DigiCert DDoS protection business acquisition, a $9.7 million increase in purchase of marketable securities and investments, and $5.0 million increase in capitalized software development costs. Partially offsetting the increase was a $15.9 million increase in proceeds from the maturity of marketable securities.

Net cash from financing activities

	Six Months Ended
	September 30,
	(in thousands)
	2026				2025
Net cash used in financing activities included the following:
Issuance of common stock under stock plans	$	3			$	2
Treasury stock repurchases		(76,974	)			(31,565	)
Tax withholding on restricted stock units		(27,653	)			(15,197	)
	$	(104,624	)		$	(46,760	)

Net cash used in financing activities increased by $57.9 million to $104.6 million during the six months ended September 30, 2026, compared with $46.8 million of cash used in financing activities during the six months ended September 30, 2025.

During the six months ended September 30, 2026, we repurchased a total of 2.0 million shares for $77.0 million in the open market under the 2022 Share Repurchase Program. During the six months ended September 30, 2025, we repurchased a total of approximately 1.5 million shares for $31.6 million in the open market under the 2022 Share Repurchase Program.

In connection with the delivery of our common stock upon vesting of restricted stock units, we withheld approximately 0.7 million shares and 0.7 million shares at a cost of $27.7 million and $15.2 million during the six months ended September 30, 2026 and 2025, respectively, in each case related to minimum statutory tax withholding requirements on these restricted stock units. These

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withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the number of shares that are available for repurchase under that program.

Sources of Cash and Cash Requirements

Credit Facility

We have a five-year, $600 million senior secured revolving credit facility under our Third Amended and Restated Credit Agreement, which matures on October 4, 2029. The facility includes a $75 million letter-of-credit sub-facility and may be used for working capital and other general corporate purposes.

We had no outstanding borrowings under the facility at September 30, 2026 or March 31, 2026, and the full commitment was available. Borrowings under the facility bear interest at variable rates based on term SOFR or an alternate base rate, plus an applicable margin. We also pay commitment fees on the unused portion of the facility.

The credit agreement contains customary covenants, including a consolidated net leverage ratio requirement and certain limitations on additional indebtedness, liens, investments, dividends, and other matters. We were in compliance with all covenants as of September 30, 2026.

Cash Requirements

We are actively managing the business to generate cash flow and believe that we currently have adequate liquidity. We believe that these factors will allow us to meet our anticipated funding requirements for at least the next twelve months and the foreseeable future.

We have contractual obligations for operating leases, unconditional purchase obligations, pension benefit plans and certain other long-term liabilities. We expect net cash provided by operating activities combined with cash, cash equivalents, marketable securities and borrowing availability under our revolving credit facility will provide sufficient liquidity to fund current obligations, capital spending, and working capital requirements over at least the next twelve months and the foreseeable future. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and our revolving credit facility. However, macroeconomic conditions, including high inflation and interest rates, and international trade relations (including trade protection measures, such as tariffs and other trade barriers), could increase our anticipated funding requirements or make it more difficult for us to access capital.

Consistent with our $55 million acquisition of the DigiCert DDoS protection business on May 1, 2026, a portion of our cash may be used to acquire or invest in complementary businesses or products, to obtain the right to use complementary technologies, or to continue to repurchase shares of our common stock through our stock repurchase programs. From time to time, in the ordinary course of business, we evaluate potential acquisitions of such businesses, products or technologies. If our existing sources of liquidity are insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities. Macroeconomic conditions, including high interest rates and volatility in the capital markets, may make it difficult for us to secure additional financing on favorable terms or at all. Any sale of additional equity or debt securities could result in additional dilution to our stockholders.

Recent Accounting Pronouncements

For information with respect to recent accounting pronouncements on our consolidated financial statements, see Note 1 contained in the "Notes to Consolidated Financial Statements" included in Part I of this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes to our quantitative and qualitative disclosures about market risk during the three months ended September 30, 2026. Refer to “Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended March 31, 2026 for a discussion of our interest rate and foreign currency exchange risks.

Item 4. Controls and Procedures

At September 30, 2026, NetScout, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, at September 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level in ensuring that material information relating to NetScout, including its consolidated subsidiaries, required to be disclosed by NetScout in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, none of the Company’s current legal proceedings and claims, if determined adversely and based on the information known to the management as of the date of this Quarterly Report, is expected to have a material adverse effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report. The risks discussed in our Annual Report could materially affect our business, financial condition and future results. There have been no material changes to those risk factors since we filed our Annual Report. The risks described in our Annual Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer

The following table provides information about purchases we made during the quarter ended September 30, 2026 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act:

Period	Total Number of Shares Purchased (1)				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs				Maximum Number of Shares That May Yet be Purchased Under the Program
7/1/2026-7/31/2026		—				—				—				20,521,049
8/1/2026-8/31/2026		1,177,879				38.80				1,177,879				19,343,170
9/1/2026-9/30/2026		822,121				37.74				822,121				18,521,049
Total		2,000,000				38.36				2,000,000				18,521,049

(1) On May 3, 2022, the Company's board of directors approved a share repurchase program that enables the Company to repurchase up to twenty-five million shares of its common stock (2022 Share Repurchase Program). The 2022 Share Repurchase Program became effective in the third quarter of fiscal year 2024. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of the 2022 Share Repurchase Program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

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Item 5. Other Information

Insider Adoption or Termination of Trading Arrangements:

During the fiscal quarter ended September 30, 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408, except as described in the table below:

Name & Title	Date Adopted	Character of Trading Arrangement(1)	Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement	Duration(2)	Date Terminated
Sanjay Munshi, Former Chief Operating Officer	August 20, 2026	Rule 10b5-1 Trading Arrangement	Up to 7,863 shares to be sold	September 15, 2027	N/A
John Downing, Executive Vice President, Worldwide Sales Operations	September 10, 2026(3)	Rule 10b5-1 Trading Arrangement	Up to 40,000 shares to be sold	February 25, 2028	N/A

(1)Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the “Rule”).

(2)Represents the expiration date of the Rule 10b5-1 Trading Arrangement. Pursuant to the terms of the Rule 10b5-1 Trading Arrangement, the Rule 10b5-1 Trading Arrangement may terminate earlier upon the occurrence of certain events.

(3)There are no overlapping transactions between Mr. Downing’s 10b5-1 trading arrangement adopted on September 10, 2026 and his arrangement adopted on November 11, 2025.

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Item 6. Exhibits

3.1			Composite conformed copy of Third Amended and Restated Certificate of Incorporation of NetScout (as amended) (filed as Exhibit 3.2 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on September 21, 2016, and incorporated herein by reference).
3.2			Amended and Restated By-laws of NetScout (filed as Exhibit 3.1 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on May 11, 2020 and incorporated herein by reference).
10.1			NetScout Systems, Inc. 2019 Equity Incentive Plan, as amended (filed as Exhibit 99.1 to NetScout's Registration Statement on Form S-8, SEC File No. 333-298889, filed on September 11, 2026 and incorporated herein by reference).
10.2			NetScout Systems, Inc. Amended and Restated 2011 Employee Stock Purchase Plan, as amended (filed as Exhibit 99.2 to NetScout's Registration Statement on Form S-8, SEC File No. 333-298889, filed on September 11, 2026 and incorporated herein by reference).
31.1	+		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	+		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	++		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	++		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS	+		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	+		Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.
104			The cover page from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2026 has been formatted in Inline XBRL and is contained in Exhibit 101.

+	Filed herewith.
++	Exhibit has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NETSCOUT SYSTEMS, INC.
Date: November 5, 2026		/s/ Anil K. Singhal
		Anil K. Singhal
		President, Chief Executive Officer and Chairman
		(Principal Executive Officer)
Date: November 5, 2026		/s/ Anthony Piazza
		Anthony Piazza
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date: November 5, 2026		/s/ Eric Watt
		Eric Watt
		Chief Accounting Officer
		(Principal Accounting Officer)

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