NetScout (NASDAQ: NTCT) posts 2026 growth and guides higher 2027 EPS
Rhea-AI Filing Summary
NETSCOUT SYSTEMS, INC. reported modestly higher revenue and a sharp improvement in profitability for fiscal year 2026, driven by growth in both product and service lines. Full-year revenue rose to $859.5 million, with product revenue of $370.1 million and service revenue of $489.3 million. GAAP results swung from a prior-year loss driven by goodwill impairment to net income of $95.5 million, while non-GAAP net income increased to $182.0 million and adjusted EBITDA reached $228.1 million, or 26.5% of revenue. In the fourth quarter, revenue was stable at $203.0 million, with stronger service revenue offsetting lower product sales, and non-GAAP diluted EPS held at $0.52. The company guided fiscal 2027 revenue to $885–$915 million and non-GAAP diluted EPS to $2.65–$2.80, reflecting mid‑single‑digit revenue growth and high‑single‑digit earnings growth expectations, including about $20 million in annualized revenue from a recently closed DDoS protection asset acquisition.
Positive
- Return to profitability and stronger margins: Fiscal 2026 GAAP net income reached $95.5 million after a prior-year goodwill-driven loss, while non-GAAP operating margin improved to 25.4% and adjusted EBITDA rose to $228.1 million (26.5% of revenue).
- Constructive fiscal 2027 outlook: Revenue is guided to $885–$915 million and non-GAAP diluted EPS to $2.65–$2.80, implying mid-single-digit revenue growth and high-single-digit earnings growth at the midpoint, supported by the accretive DigiCert DDoS asset acquisition.
Negative
- None.
Insights
NetScout posts steady growth, margin expansion, and issues constructive 2027 guidance.
NETSCOUT delivered fiscal 2026 revenue of $859.5 million, up from $822.7 million, with both product and service lines growing. GAAP swung to net income of $95.5 million after a prior-year goodwill impairment, while non-GAAP net income rose to $182.0 million.
Profitability metrics improved: non-GAAP operating margin reached 25.4% and adjusted EBITDA was $228.1 million, or 26.5% of revenue. The balance sheet strengthened, with cash and investments increasing to $705.1 million and no borrowings under a $600 million revolver.
For fiscal 2027, management guides revenue to $885–$915 million and non-GAAP diluted EPS to $2.65–$2.80, implying nearly 9.9% year-over-year non-GAAP EPS growth at the midpoint. Guidance includes approximately $20 million in annualized revenue from the DigiCert DDoS asset acquisition, described as immediately accretive.
8-K Event Classification
Key Figures
Key Terms
adjusted EBITDA financial
non-GAAP operating margin financial
goodwill impairment financial
Distributed Denial-of-Service (DDoS) protection technical
AI-ready data platform technical
Earnings Snapshot
For fiscal 2027, revenue is expected at $885–$915 million, GAAP diluted EPS at $1.55–$1.70, and non-GAAP diluted EPS at $2.65–$2.80, including about $20 million in annualized revenue from the DigiCert DDoS asset acquisition.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
The following information and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
On May 7, 2026, NetScout Systems, Inc. (the “Company”) issued a press release regarding its financial results for the fourth fiscal quarter and the fiscal year 2026 each ended March 31, 2026, its expectations of future performance and its intention to hold a conference call regarding these topics. The Company's press release is furnished as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The Company hereby furnishes the following exhibit:
Exhibit Number |
Description |
99.1 |
Press release titled "NETSCOUT Reports Fourth Quarter and Full Fiscal Year 2026 Financial Results" issued by NetScout Systems, Inc. on May 7, 2026. |
104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 7th day of May, 2026.
NETSCOUT SYSTEMS, INC. |
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By: |
/s/ Anthony Piazza |
Name: |
Anthony Piazza |
Title: |
Executive Vice President and Chief Financial Officer |
Exhibit 99.1
NETSCOUT Reports Fourth Quarter and Full Fiscal Year 2026 Financial Results
Company Delivers Strong Fiscal Year 2026 Results and Achieves Key Strategic Objectives
Fiscal Year 2027 Outlook Signals Continued Top and Bottom-Line Growth
WESTFORD, Mass. – NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT), a leading provider of enterprise network observability, carrier service assurance, cybersecurity, and Distributed Denial-of-Service (DDoS) protection solutions, today announced financial results for its fourth quarter and full fiscal year ended March 31, 2026.
Remarks by Anil Singhal, NETSCOUT’s President & Chief Executive Officer:
“We delivered strong fiscal year 2026 top- and bottom-line results, fueled by revenue growth across both our Cybersecurity and Service Assurance offerings, as we successfully navigate a dynamic macro environment. We achieved our key strategic objectives for the fiscal year by accelerating product innovation, driving annual revenue growth, and expanding margins, underscoring the strength of our strategy and the discipline of our execution.
“Looking ahead, we are excited about the year in front of us and are leaning into this momentum. We are committed to executing our strategy and driving continued innovation, sustained revenue growth, and further operating margin expansion. We see significant opportunities over the long term to leverage NETSCOUT’s deep expertise in cybersecurity and network observability, together with our AI-ready data platform, to help customers advance their AI and digital transformation initiatives and to manage an increasingly complex digital environment where network performance, availability, and security are mission-critical.”
Q4 FY26 Financial Results
Total revenue for the fourth quarter of fiscal year 2026 was $203.0 million, compared with $205.0 million for the fourth quarter of fiscal year 2025.
Product revenue for the fourth quarter of fiscal year 2026 was $80.7 million, or approximately 40% of total revenue for the period. This compares with product revenue of $89.5 million, or approximately 44% of total revenue, for the fourth quarter of fiscal year 2025. As of March 31, 2026, NETSCOUT had a total product backlog of approximately $50 million, which includes $45.8 million of fulfillable backlog. This compares to product backlog of approximately $33 million as of March 31, 2025, which included $25.1 million of fulfillable backlog.
Service revenue for the fourth quarter of fiscal year 2026 increased to $122.3 million, or approximately 60% of total revenue for the period. This compares with service revenue of $115.5 million, or approximately 56% of revenue, for the fourth quarter of fiscal year 2025.
NETSCOUT’s GAAP income from operations was $19.6 million in the fourth quarter of fiscal year 2026. This compares with GAAP income from operations of $19.9 million in the fourth quarter of fiscal year 2025. The Company’s GAAP operating margin was 9.6% in the fourth quarter of fiscal year 2026, versus 9.7% in the same period in fiscal year 2025. Non-GAAP income from operations was $43.9 million, with a non-GAAP operating margin of 21.6%. This compares to non-GAAP income from operations of $47.3 million with a non-GAAP operating margin of 23.1% in the fourth quarter of fiscal year 2025. A reconciliation of all GAAP and non-GAAP results are included in the financial tables below.
Net income (GAAP) for the fourth quarter of fiscal year 2026 was $18.2 million, or $0.25 per share (diluted), versus a GAAP net income of $18.6 million, or $0.25 per share (diluted), for the fourth quarter of fiscal year 2025. Non-GAAP net income was $38.5 million or $0.52 per share (diluted), for the fourth quarter of fiscal year 2026, compared with $38.0 million, or $0.52 per share (diluted), for the fourth quarter of fiscal year 2025. Adjusted EBITDA in the fourth quarter of fiscal year 2026 was $46.4 million, or 22.9 % of quarterly revenue for the period. This compares to adjusted EBITDA of $50.3 million in the fourth quarter of fiscal year 2025, or 24.5 % of quarterly revenue for the period.
During the fourth quarter, NETSCOUT repurchased 1.0 million shares of its common stock for approximately $29 million. As of March 31, 2026, cash, cash equivalents, short and long-term marketable securities and investments increased to $705.1 million, compared with $492.5 million as of March 31, 2025. As of March 31, 2026, the Company had no debt outstanding under its $600 million revolving credit facility, which expires in October 2029.
Full Fiscal Year 2026 Financial Results
2
Financial Outlook
For fiscal year 2027, the Company is providing the following outlook, which reflects expected continued growth and margin expansion:
Recent Developments and Highlights
Conference Call Instructions:
NETSCOUT will host a conference call to discuss its fourth quarter and full fiscal year 2026 financial results and fiscal year 2027 financial outlook today at 8:30 a.m. ET. This call will be webcast live through NETSCOUT’s website at https://ir.netscout.com/investors/overview/default.aspx. Alternatively, investors can listen to the call by dialing (800) 267-6316, or (203) 518-9783 for international callers. The conference call ID is NTCTQ426. A replay of the call will be available after 12:00 p.m. ET today for approximately one week. The number for the replay is (800) 839-0861, or (402) 220-0661 for international callers. An archived version of the webcast, press release and conference call remarks will be available on NETSCOUT’s website for one year.
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Use of Non-GAAP Financial Information:
To supplement the financial measures presented in NETSCOUT's press release in accordance with accounting principles generally accepted in the United States (GAAP), NETSCOUT also reports the following non-GAAP measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted net income per share, and adjusted EBITDA.Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets, share-based compensation expense, and acquisition-related depreciation expense. from gross profit (GAAP). Non-GAAP income from operations includes the aforementioned adjustments related to non-GAAP gross profit and also removes goodwill impairment charges, 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 diluted net income per 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 taxes, and non-acquisition related depreciation from net income (GAAP). Beginning in the third quarter of fiscal year 2026, we have renamed non-GAAP EBITDA 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 press release.
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 diluted net income per share), and may have limitations because they do not reflect all NETSCOUT’s results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate NETSCOUT’s 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. NETSCOUT believes these non-GAAP financial measures will enhance the reader’s overall understanding of NETSCOUT’s current financial performance and NETSCOUT's 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. NETSCOUT believes that providing these non-GAAP measures affords investors a view of NETSCOUT’s operating results that may be more easily compared to peer companies and also enables investors to consider NETSCOUT’s operating results on both a GAAP and non-GAAP basis during and following the integration period of NETSCOUT’s acquisitions. Presenting the GAAP measures on their own, without the supplemental non-GAAP disclosures, might not be indicative of NETSCOUT’s core operating results. Furthermore, NETSCOUT believes 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 its financial condition and results of operations.
4
NETSCOUT management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions. These non-GAAP measures are among the primary factors that management uses in planning and forecasting.
About NETSCOUT
NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT) is a leading provider of enterprise network observability, carrier service assurance, cybersecurity, and Distributed Denial-of-Service (DDoS) protection solutions. NETSCOUT protects the connected world from cyberattacks and performance and availability disruptions through the company’s unique visibility platform and solutions powered by its pioneering deep packet inspection at scale technology. NETSCOUT serves the world’s largest enterprises, service providers, and public sector organizations. Learn more at www.netscout.com or follow @NETSCOUT on LinkedIn, X, or Facebook.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Examples of forward-looking statements include statements regarding our future financial performance or position, liquidity, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical fact. You can identify forward-looking statements by their use of forward-looking words such as “may,” “will,” “anticipate,” “expect,” “believe,” “estimate,” “intend,” “plan,” “should,” “seek,” or other comparable terms. Investors are cautioned that such forward-looking statements in this press release include, without limitation, statements regarding NETSCOUT’s ability to leverage the strength of its AI-ready data platform to help customers advance their AI and digital transformation initiatives and to manage an increasingly complex digital environment; NETSCOUT’s financial outlook and expectations; NETSCOUT’s strategic objectives, plans, commitments, aspirations and goals. Actual results could differ materially from those indicated in the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors, including macroeconomic factors and slowdowns or downturns in economic conditions generally and in the market for advanced networks, service assurance and cybersecurity solutions specifically; the volatile foreign exchange environment; the Company’s relationships with strategic partners and resellers; dependence upon broad-based acceptance of the Company’s network performance management solutions; the presence of competitors with greater financial resources than the Company has, and their strategic response to the Company’s products; the Company’s ability to retain key executives and employees; the Company’s ability to realize the anticipated savings from restructuring actions and other expense management programs; potential lower than expected demand for the Company’s products and services; the Company’s ability to recognize the expected gain from its acquisition of the assets of DigiCert, Inc.’s DDoS protection business; and the timing and magnitude of stock buyback activity based on market conditions, corporate considerations, debt agreements, and regulatory requirements. The risks included above are not exhaustive. For a more detailed description of the risk factors associated with the Company, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the Securities and Exchange Commission, including but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking information in this press release is as of the date of this press release, and NETSCOUT undertakes no obligation to update such information unless required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking
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statements and you should not place undue reliance on our forward-looking statements. NETSCOUT’s financial guidance is based on estimates and assumptions that are subject to significant uncertainties.
©2026 NETSCOUT SYSTEMS, INC. All rights reserved. NETSCOUT and the NETSCOUT logo are registered trademarks or trademarks of NETSCOUT SYSTEMS, INC. and/or its subsidiaries and/or affiliates in the USA and/or other countries.
Contacts: |
Investors |
Media |
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Scott Dressel |
Chris Lucas |
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VP, Corporate Finance |
AVP, Marketing & Corporate Communications |
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978-614-4000 |
978-614-4124 |
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IR@netscout.com |
Chris.Lucas@netscout.com |
6
NETSCOUT SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except for per share data)
(Unaudited)
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Three Months Ended |
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Twelve Months Ended |
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March 31, |
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March 31, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenue: |
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Product |
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$ |
80,736 |
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$ |
89,517 |
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$ |
370,145 |
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$ |
359,894 |
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Service |
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122,299 |
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115,470 |
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489,337 |
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462,785 |
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Total revenue |
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$ |
203,035 |
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$ |
204,987 |
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$ |
859,482 |
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$ |
822,679 |
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Cost of revenue: |
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Product |
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12,277 |
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15,657 |
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50,594 |
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57,463 |
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Service |
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31,650 |
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30,040 |
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126,394 |
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121,272 |
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Total cost of revenue |
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43,927 |
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45,697 |
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176,988 |
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178,735 |
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Gross profit |
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159,108 |
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159,290 |
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682,494 |
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643,944 |
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Operating expenses: |
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Research and development |
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39,768 |
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36,737 |
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159,461 |
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152,864 |
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Sales and marketing |
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63,626 |
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|
|
66,562 |
|
|
|
264,538 |
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|
|
268,051 |
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General and administrative |
|
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24,936 |
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|
|
23,917 |
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|
|
103,185 |
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|
|
96,724 |
|
Amortization of acquired intangible assets |
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11,165 |
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|
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11,583 |
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|
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44,602 |
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46,440 |
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Restructuring charges |
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25 |
|
|
|
605 |
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|
|
883 |
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20,500 |
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Goodwill impairment |
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— |
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— |
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— |
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426,967 |
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Total operating expenses |
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139,520 |
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139,404 |
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572,669 |
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|
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1,011,546 |
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Income (loss) from operations |
|
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19,588 |
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19,886 |
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|
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109,825 |
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(367,602 |
) |
Interest and other income (expense), net |
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3,758 |
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(1,685 |
) |
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8,683 |
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1,808 |
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Income (loss) before income tax expense (benefit) |
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23,346 |
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18,201 |
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118,508 |
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(365,794 |
) |
Income tax expense (benefit) |
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5,106 |
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(416 |
) |
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22,977 |
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1,128 |
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Net income (loss) |
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$ |
18,240 |
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$ |
18,617 |
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$ |
95,531 |
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$ |
(366,922 |
) |
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Basic net income (loss) per share |
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$ |
0.25 |
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$ |
0.26 |
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$ |
1.33 |
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$ |
(5.12 |
) |
Diluted net income (loss) per share |
|
$ |
0.25 |
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$ |
0.25 |
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$ |
1.30 |
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$ |
(5.12 |
) |
Weighted average common shares outstanding used in computing: |
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Net income (loss) per share - basic |
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71,915 |
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71,862 |
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71,984 |
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71,627 |
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Net income (loss) per share - diluted |
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74,171 |
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|
|
73,410 |
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|
|
73,355 |
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|
71,627 |
|
7
NETSCOUT SYSTEMS, INC.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
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March 31, |
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March 31, |
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2026 |
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2025 |
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Assets |
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Current assets: |
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Cash, cash equivalents, marketable securities and investments |
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$ |
667,957 |
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$ |
491,473 |
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Accounts receivable and unbilled costs, net |
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151,473 |
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163,654 |
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Inventories and deferred costs |
|
|
13,321 |
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12,891 |
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Prepaid expenses and other current assets |
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35,131 |
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45,166 |
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Total current assets |
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867,882 |
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|
713,184 |
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Fixed assets, net |
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23,558 |
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|
21,529 |
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Operating lease right-of-use assets |
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35,553 |
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|
37,717 |
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Goodwill and intangible assets, net |
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1,284,887 |
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|
1,335,073 |
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Long-term marketable securities |
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|
37,188 |
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|
|
1,004 |
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Other assets |
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|
105,449 |
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|
|
78,071 |
|
Total assets |
|
$ |
2,354,517 |
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$ |
2,186,578 |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
|
$ |
23,492 |
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$ |
18,208 |
|
Accrued compensation |
|
|
84,515 |
|
|
|
56,696 |
|
Accrued other |
|
|
21,667 |
|
|
|
20,280 |
|
Deferred revenue and customer deposits |
|
|
330,601 |
|
|
|
301,753 |
|
Current portion of operating lease liabilities |
|
|
9,874 |
|
|
|
10,995 |
|
Total current liabilities |
|
|
470,149 |
|
|
|
407,932 |
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|
|
|
|
|
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Other long-term liabilities |
|
|
6,568 |
|
|
|
8,210 |
|
Deferred tax liability |
|
|
2,225 |
|
|
|
2,643 |
|
Accrued long-term retirement benefits |
|
|
28,336 |
|
|
|
27,379 |
|
Long-term deferred revenue and customer deposits |
|
|
168,261 |
|
|
|
147,510 |
|
Operating lease liabilities, net of current portion |
|
|
29,718 |
|
|
|
32,509 |
|
Total liabilities |
|
|
705,257 |
|
|
|
626,183 |
|
|
|
|
|
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Stockholders' equity: |
|
|
|
|
|
|
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Common stock |
|
|
136 |
|
|
|
134 |
|
Additional paid-in capital |
|
|
3,325,400 |
|
|
|
3,255,333 |
|
Accumulated other comprehensive income |
|
|
4,032 |
|
|
|
4,073 |
|
Treasury stock, at cost |
|
|
(1,731,396 |
) |
|
|
(1,654,702 |
) |
Retained earnings (Accumulated deficit) |
|
|
51,088 |
|
|
|
(44,443 |
) |
Total stockholders' equity |
|
|
1,649,260 |
|
|
|
1,560,395 |
|
Total liabilities and stockholders' equity |
|
$ |
2,354,517 |
|
|
$ |
2,186,578 |
|
8
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures
(In thousands, except for per share data)
(Unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|||||||||||
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue (GAAP) |
|
$ |
203,035 |
|
|
$ |
204,987 |
|
|
$ |
250,683 |
|
|
$ |
859,482 |
|
|
$ |
822,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit (GAAP) |
|
$ |
159,108 |
|
|
$ |
159,290 |
|
|
$ |
204,654 |
|
|
$ |
682,494 |
|
|
$ |
643,944 |
|
Share-based compensation expense (1) |
|
|
2,176 |
|
|
|
2,090 |
|
|
|
2,267 |
|
|
|
9,830 |
|
|
|
9,806 |
|
Amortization of acquired intangible assets (2) |
|
|
550 |
|
|
|
993 |
|
|
|
550 |
|
|
|
2,202 |
|
|
|
3,978 |
|
Acquisition related depreciation expense (3) |
|
|
2 |
|
|
|
1 |
|
|
|
2 |
|
|
|
7 |
|
|
|
6 |
|
Non-GAAP gross profit |
|
$ |
161,836 |
|
|
$ |
162,374 |
|
|
$ |
207,473 |
|
|
$ |
694,533 |
|
|
$ |
657,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from operations (GAAP) |
|
$ |
19,588 |
|
|
$ |
19,886 |
|
|
$ |
64,315 |
|
|
$ |
109,825 |
|
|
$ |
(367,602 |
) |
GAAP operating margin |
|
|
9.6 |
% |
|
|
9.7 |
% |
|
|
25.7 |
% |
|
|
12.8 |
% |
|
|
(44.7 |
)% |
Share-based compensation expense (1) |
|
|
12,599 |
|
|
|
14,199 |
|
|
|
13,832 |
|
|
|
59,948 |
|
|
|
64,785 |
|
Amortization of acquired intangible assets (2) |
|
|
11,715 |
|
|
|
12,576 |
|
|
|
11,706 |
|
|
|
46,804 |
|
|
|
50,418 |
|
Restructuring charges |
|
|
25 |
|
|
|
605 |
|
|
|
25 |
|
|
|
883 |
|
|
|
20,500 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
426,967 |
|
Acquisition related depreciation expense (3) |
|
|
12 |
|
|
|
11 |
|
|
|
12 |
|
|
|
48 |
|
|
|
47 |
|
Executive transition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
|
|
— |
|
Non-GAAP income from operations |
|
$ |
43,939 |
|
|
$ |
47,277 |
|
|
$ |
89,890 |
|
|
$ |
218,467 |
|
|
$ |
195,115 |
|
Non-GAAP operating margin |
|
|
21.6 |
% |
|
|
23.1 |
% |
|
|
35.9 |
% |
|
|
25.4 |
% |
|
|
23.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) (GAAP) |
|
$ |
18,240 |
|
|
$ |
18,617 |
|
|
$ |
55,142 |
|
|
$ |
95,531 |
|
|
$ |
(366,922 |
) |
Share-based compensation expense (1) |
|
|
12,599 |
|
|
|
14,199 |
|
|
|
13,832 |
|
|
|
59,948 |
|
|
|
64,785 |
|
Amortization of acquired intangible assets (2) |
|
|
11,715 |
|
|
|
12,576 |
|
|
|
11,706 |
|
|
|
46,804 |
|
|
|
50,418 |
|
Restructuring charges |
|
|
25 |
|
|
|
605 |
|
|
|
25 |
|
|
|
883 |
|
|
|
20,500 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
426,967 |
|
Acquisition related depreciation expense (3) |
|
|
12 |
|
|
|
11 |
|
|
|
12 |
|
|
|
48 |
|
|
|
47 |
|
Executive transition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
|
|
— |
|
Loss on extinguishment of debt (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,134 |
|
Income tax adjustments (6) |
|
|
(4,116 |
) |
|
|
(8,004 |
) |
|
|
(6,971 |
) |
|
|
(22,135 |
) |
|
|
(36,503 |
) |
Non-GAAP net income |
|
$ |
38,475 |
|
|
$ |
38,004 |
|
|
$ |
73,746 |
|
|
$ |
182,038 |
|
|
$ |
160,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net income (loss) per share (GAAP) |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.75 |
|
|
$ |
1.30 |
|
|
$ |
(5.12 |
) |
Share impact of non-GAAP adjustments identified above |
|
|
0.27 |
|
|
|
0.27 |
|
|
|
0.25 |
|
|
|
1.18 |
|
|
|
7.34 |
|
Non-GAAP diluted net income per share |
|
$ |
0.52 |
|
|
$ |
0.52 |
|
|
$ |
1.00 |
|
|
$ |
2.48 |
|
|
$ |
2.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares used in computing non-GAAP diluted net income per share |
|
|
74,171 |
|
|
|
73,410 |
|
|
|
73,820 |
|
|
|
73,355 |
|
|
|
72,235 |
|
9
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures - Continued
(In thousands)
(Unaudited)
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|||||||||||
|
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|||||
(1) |
Share-based compensation expense included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of product revenue |
|
$ |
275 |
|
|
$ |
283 |
|
|
$ |
298 |
|
|
$ |
1,283 |
|
|
$ |
1,296 |
|
|
Cost of service revenue |
|
|
1,901 |
|
|
|
1,807 |
|
|
|
1,969 |
|
|
|
8,547 |
|
|
|
8,510 |
|
|
Research and development |
|
|
3,843 |
|
|
|
4,062 |
|
|
|
4,114 |
|
|
|
17,479 |
|
|
|
17,956 |
|
|
Sales and marketing |
|
|
4,412 |
|
|
|
4,915 |
|
|
|
4,749 |
|
|
|
20,721 |
|
|
|
22,765 |
|
|
General and administrative |
|
|
2,168 |
|
|
|
3,132 |
|
|
|
2,702 |
|
|
|
11,918 |
|
|
|
14,258 |
|
|
Total share-based compensation expense |
|
$ |
12,599 |
|
|
$ |
14,199 |
|
|
$ |
13,832 |
|
|
$ |
59,948 |
|
|
$ |
64,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(2) |
Amortization expense related to acquired software and product technology, tradenames, customer relationships included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of product revenue |
|
$ |
550 |
|
|
$ |
993 |
|
|
$ |
550 |
|
|
$ |
2,202 |
|
|
$ |
3,978 |
|
|
Operating expenses |
|
|
11,165 |
|
|
|
11,583 |
|
|
|
11,156 |
|
|
|
44,602 |
|
|
|
46,440 |
|
|
Total amortization expense |
|
$ |
11,715 |
|
|
$ |
12,576 |
|
|
$ |
11,706 |
|
|
$ |
46,804 |
|
|
$ |
50,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(3) |
Acquisition related depreciation expense included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of product revenue |
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
2 |
|
|
$ |
7 |
|
|
$ |
6 |
|
|
Cost of service revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Research and development |
|
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
31 |
|
|
|
31 |
|
|
Sales and marketing |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
9 |
|
|
|
9 |
|
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Total acquisition related depreciation expense |
|
$ |
12 |
|
|
$ |
11 |
|
|
$ |
12 |
|
|
$ |
48 |
|
|
$ |
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(4) |
Executive transition costs included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
General and administrative |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
959 |
|
|
$ |
— |
|
|
Total executive transition costs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
959 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(5) |
Loss on extinguishment of debt included in this amount is as follows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Interest and other (income) expense, net |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,134 |
|
|
Total loss on extinguishment of debt |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(6) |
Total income tax adjustment included in this amount is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Tax effect of non-GAAP adjustments above |
|
$ |
(4,116 |
) |
|
$ |
(8,004 |
) |
|
$ |
(6,971 |
) |
|
$ |
(22,135 |
) |
|
$ |
(36,503 |
) |
|
Total income tax adjustments |
|
$ |
(4,116 |
) |
|
$ |
(8,004 |
) |
|
$ |
(6,971 |
) |
|
$ |
(22,135 |
) |
|
$ |
(36,503 |
) |
10
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures -
Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|||||||||||
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) (GAAP) |
|
$ |
18,240 |
|
|
$ |
18,617 |
|
|
$ |
55,142 |
|
|
$ |
95,531 |
|
|
$ |
(366,922 |
) |
Net income (loss) (GAAP) as a % of revenue |
|
|
9.0 |
% |
|
|
9.1 |
% |
|
|
22.0 |
% |
|
|
11.1 |
% |
|
|
(44.6 |
)% |
Share-based compensation expense (1) |
|
|
12,599 |
|
|
|
14,199 |
|
|
|
13,832 |
|
|
|
59,948 |
|
|
|
64,785 |
|
Amortization of acquired intangible assets (2) |
|
|
11,715 |
|
|
|
12,576 |
|
|
|
11,706 |
|
|
|
46,804 |
|
|
|
50,418 |
|
Restructuring charges |
|
|
25 |
|
|
|
605 |
|
|
|
25 |
|
|
|
883 |
|
|
|
20,500 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
426,967 |
|
Acquisition related depreciation expense (3) |
|
|
12 |
|
|
|
11 |
|
|
|
12 |
|
|
|
48 |
|
|
|
47 |
|
Loss on extinguishment of debt (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,134 |
|
Executive transition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
|
|
— |
|
Income tax adjustments (6) |
|
|
(4,116 |
) |
|
|
(8,004 |
) |
|
|
(6,971 |
) |
|
|
(22,135 |
) |
|
|
(36,503 |
) |
Net income non-GAAP |
|
$ |
38,475 |
|
|
$ |
38,004 |
|
|
$ |
73,746 |
|
|
$ |
182,038 |
|
|
$ |
160,426 |
|
Interest and other (income) expense, net GAAP |
|
|
(3,758 |
) |
|
|
1,685 |
|
|
|
(2,293 |
) |
|
|
(8,683 |
) |
|
|
(1,808 |
) |
Loss on extinguishment of debt (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,134 |
) |
Interest and other (income) expense, net non-GAAP |
|
|
(3,758 |
) |
|
|
1,685 |
|
|
|
(2,293 |
) |
|
|
(8,683 |
) |
|
|
(2,942 |
) |
Depreciation excluding acquisition related-depreciation expense |
|
|
2,496 |
|
|
|
3,009 |
|
|
|
1,781 |
|
|
|
9,681 |
|
|
|
13,321 |
|
Income tax expense non-GAAP |
|
|
9,222 |
|
|
|
7,588 |
|
|
|
18,437 |
|
|
|
45,112 |
|
|
|
37,631 |
|
Adjusted EBITDA |
|
$ |
46,435 |
|
|
$ |
50,286 |
|
|
$ |
91,671 |
|
|
$ |
228,148 |
|
|
$ |
208,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA as a % of revenue |
|
|
22.9 |
% |
|
|
24.5 |
% |
|
|
36.6 |
% |
|
|
26.5 |
% |
|
|
25.3 |
% |
11
NETSCOUT SYSTEMS, INC.
Reconciliation of GAAP Financial Outlook to Non-GAAP Financial Outlook
(Unaudited)
(In millions, except net income per share - diluted)
|
|
FY'26 |
|
|
FY'27 |
|
GAAP & non-GAAP revenue |
|
$ |
859.5 |
|
|
~$885 million to ~$915 million |
|
|
|
|
|
|
|
|
|
FY'26 |
|
|
FY'27 |
|
GAAP net income (loss) |
|
$ |
95.5 |
|
|
~$115 million to ~$126 million |
Amortization of intangible assets |
|
$ |
46.8 |
|
|
~$44 million |
Share-based compensation expenses |
|
$ |
59.9 |
|
|
~$57 million |
Business development & integration expenses |
|
$ |
— |
|
|
~Less than $1 million |
Restructuring charges |
|
$ |
0.9 |
|
|
— |
Executive transition costs |
|
$ |
1.0 |
|
|
— |
Total adjustments |
|
$ |
108.6 |
|
|
~$102 million |
Related impact of adjustments on income tax |
|
$ |
(22.1 |
) |
|
(~$20 million) |
Non-GAAP net income |
|
$ |
182.0 |
|
|
~$197 million to ~$208 million |
|
|
|
|
|
|
|
GAAP net income (loss) per share (diluted) |
|
$ |
1.30 |
|
|
~$1.55 to ~$1.70 |
Non-GAAP net income per share (diluted) |
|
$ |
2.48 |
|
|
~$2.65 to ~$2.80 |
|
|
|
|
|
|
|
Average weighted shares outstanding (diluted GAAP) |
|
|
73.4 |
|
|
~74 million to ~75 million |
Average weighted shares outstanding (diluted non-GAAP) |
|
|
73.4 |
|
|
~74 million to ~75 million |
**Figures in table may not total due to rounding
12