NETSCOUT Q2 2027 net income rises to $34.4M
The reaffirmed FY2027 ranges came alongside contrasting quarterly trends: product revenue declined 5.1%, while service revenue increased 6.4%.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
NETSCOUT Systems, Inc. (NTCT) reported fiscal second-quarter 2027 revenue of $222.2 million, up 1.4% from $219.0 million a year earlier. Product revenue fell 5.1% to $89.9 million, while service revenue rose 6.4% to $132.3 million. GAAP operating income was $37.6 million, compared with $32.5 million; GAAP net income was $34.4 million, or $0.47 per diluted share, versus $25.8 million, or $0.35.
For the first six months, revenue increased 6.6% to $432.6 million, compared with $405.8 million, and GAAP net income was $56.2 million versus $22.1 million. NETSCOUT reaffirmed fiscal 2027 outlook: revenue of $885.0 million to $915.0 million, GAAP net income per diluted share of $1.55 to $1.70, and non-GAAP net income per diluted share of $2.65 to $2.80.
During the quarter, NETSCOUT repurchased 2.0 million common shares for approximately $77 million. It also revised several non-GAAP definitions to exclude acquisition-related depreciation expense; prior-period measures were recast, and the company said the change does not affect financial position, cash flows, or GAAP consolidated results of operations.
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.
Positive
- Moderate pointFirst-half revenue increased 6.6% to $432.6 million.
- Moderate pointFirst-half GAAP net income was $56.2 million, versus $22.1 million.
Negative
- Moderate pointSecond-quarter product revenue fell 5.1% to $89.9 million.
Filing Explained
The attached results release reports
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Non-GAAP operating margin financial
fulfillable backlog financial
AI-Ready Smart Data technical
Earnings Snapshot
FY2027 revenue of $885.0 million to $915.0 million; GAAP net income per diluted share of $1.55 to $1.70; non-GAAP net income per diluted share of $2.65 to $2.80.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net income did NTCT report for fiscal Q2 2027?
What is NETSCOUT's fiscal 2027 financial outlook?
What was NTCT's product backlog at September 30, 2026?
What changed in NETSCOUT's non-GAAP calculations?
AI-generated analysis. How Rhea-AI works. Not financial advice.
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
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction |
(Commission File Number) |
(I.R.S. Employer |
(Address of principal executive offices and zip code)
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol |
|
Name of each exchange on which registered |
|
|
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 November 5, 2026, NetScout Systems, Inc. (the “Company”) issued a press release regarding its financial results for the second fiscal quarter of fiscal year 2027 ended September 30, 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 Second Quarter Fiscal Year 2027 Financial Results" issued by NetScout Systems, Inc. on November 5, 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 5th day of November, 2026.
NETSCOUT SYSTEMS, INC. |
|
|
|
By: |
/s/ Anthony Piazza |
Name: |
Anthony Piazza |
Title: |
Executive Vice President and Chief Financial Officer |
Exhibit 99.1
NETSCOUT Reports Second Quarter Fiscal Year 2027 Financial Results
Delivers Second Quarter Results in Line with Expectations;
Reaffirms Full Year Outlook
WESTFORD, Mass.– NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT), a leading provider of network observability, AIOps, carrier service assurance, cybersecurity, and DDoS attack protection, announced financial results for its second quarter ended September 30, 2026.
Remarks by Anil Singhal, NETSCOUT’s President & Chief Executive Officer:
“Our second-quarter results were consistent with our expectations, and our first half performance keeps us on track for fiscal year 2027. As anticipated, government-related orders that benefited the first quarter shaped our second quarter comparison. Our continued focus on cost discipline drove operating margin expansion from the prior year, and we repurchased approximately $77 million of common stock during the quarter, reflecting our commitment to shareholder returns. We are reaffirming our full-year outlook as we continue to execute on our strategy to drive revenue growth, expand margins, and generate solid free cash flow.
“At our ENGAGE Annual User and Technology Summit in October, we showcased our newest solutions and capabilities to an enthusiastic audience of more than 400 customers and partners. These solutions extend our Scalable DPI derived, AI-Ready Smart Data into AIOps and agentic workflows. Our customers are in the early phases of their AI journey, and we view this as a multi-year opportunity rather than a near-term cycle. As their investment matures, NETSCOUT’s role as a trusted data source for network observability, AI, and cybersecurity, positions us to expand within our installed base, capture new opportunities, and drive long-term growth.”
Second Quarter Financial Results: FY2027 compared with FY2026
or $0.35 per diluted share.
$0.62 per diluted share.
During the second quarter, NETSCOUT repurchased 2.0 million shares of its common stock for approximately $77 million. As of September 30, 2026, cash, cash equivalents, and short and long-term marketable securities totaled $571.3 million, compared with $705.1 million as of March 31, 2026. As of September 30, 2026, the Company had no debt outstanding under its $600 million revolving credit facility, which expires in October 2029.
First-Half Financial Results: FY2027 compared with FY2026
$25.9 million, or 6.4% of total revenue.
$84.6 million, or 20.9%.
or $0.30 per diluted share.
$0.95 per diluted share.
or 22.2 %.
A reconciliation of GAAP and non-GAAP results is included in the financial tables below.
Financial Outlook
For fiscal year 2027, NETSCOUT is reaffirming its outlook, reflecting anticipated continued growth and margin expansion:
Recent Developments and Highlights
Conference Call Instructions:
NETSCOUT will host a conference call to discuss its second quarter financial results and full fiscal year 2027 financial outlook:
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 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 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 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. 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 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.
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) protects the connected world from cyberattacks and performance and availability disruptions through its unique visibility platform and solutions powered by its
pioneering deep packet inspection at scale technology. As a leading provider of network observability, AIOps, carrier service assurance, cybersecurity, and Distributed Denial-of-Service (DDoS) attack protection solutions, 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 continuing to execute on its strategy to drive revenue growth, margin expansion, and solid free cash flow; NETSCOUT’s expectations regarding AI-related market opportunities and its ability to expand within its installed base, capture new opportunities and drive long-term growth; 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; potential lower than expected demand for the Company’s products and services; and the Company’s ability to recognize the expected gain from its acquisition of the assets of DigiCert, Inc.’s DDoS protection business. 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 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.
Investor Contact |
Media Contact |
Scott Dressel, VP, Corporate Finance |
Chris Lucas, AVP, Marketing & Corporate Communications |
978-614-4000, IR@netscout.com |
978-614-4124, Chris.Lucas@netscout.com |
NETSCOUT SYSTEMS, INC.
Condensed 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 (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 |
|
Net income per diluted 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 |
|
NETSCOUT SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
||
|
|
September 30, |
|
|
March 31, |
|
||
|
|
2026 |
|
|
2026 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash, cash equivalents and marketable securities |
|
$ |
516,723 |
|
|
$ |
667,957 |
|
Accounts receivable and unbilled costs, net |
|
|
137,314 |
|
|
|
151,473 |
|
Inventories and deferred costs |
|
|
30,004 |
|
|
|
13,321 |
|
Prepaid expenses and other current assets |
|
|
45,766 |
|
|
|
35,131 |
|
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 and intangible assets, net |
|
|
1,311,756 |
|
|
|
1,284,887 |
|
Long-term marketable securities |
|
|
54,549 |
|
|
|
37,188 |
|
Other assets |
|
|
120,284 |
|
|
|
105,449 |
|
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 |
|
|
16,106 |
|
|
|
21,667 |
|
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 |
|
Stockholders' equity: |
|
|
|
|
|
|
||
Common stock |
|
|
139 |
|
|
|
136 |
|
Additional paid-in capital |
|
|
3,362,375 |
|
|
|
3,325,400 |
|
Accumulated other comprehensive income |
|
|
3,193 |
|
|
|
4,032 |
|
Treasury stock, at cost |
|
|
(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 |
|
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 |
|
|
Six Months Ended |
|
|||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
222,185 |
|
|
$ |
219,017 |
|
|
$ |
210,423 |
|
|
$ |
432,608 |
|
|
$ |
405,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit (GAAP) |
|
$ |
176,650 |
|
|
$ |
175,407 |
|
|
$ |
165,933 |
|
|
$ |
342,583 |
|
|
$ |
318,732 |
|
Share-based compensation expense (1) |
|
|
2,297 |
|
|
|
2,227 |
|
|
|
3,117 |
|
|
|
5,416 |
|
|
|
5,387 |
|
Amortization of acquired intangible assets (2) |
|
|
777 |
|
|
|
551 |
|
|
|
642 |
|
|
|
1,419 |
|
|
|
1,101 |
|
Non-GAAP gross profit |
|
$ |
179,724 |
|
|
$ |
178,185 |
|
|
$ |
169,692 |
|
|
$ |
349,418 |
|
|
$ |
325,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from operations (GAAP) |
|
$ |
37,592 |
|
|
$ |
32,486 |
|
|
$ |
14,477 |
|
|
$ |
52,070 |
|
|
$ |
25,922 |
|
GAAP operating margin |
|
|
16.9 |
% |
|
|
14.8 |
% |
|
|
6.9 |
% |
|
|
12.0 |
% |
|
|
6.4 |
% |
Share-based compensation expense (1) |
|
|
13,865 |
|
|
|
13,557 |
|
|
|
17,965 |
|
|
|
31,830 |
|
|
|
33,516 |
|
Amortization of acquired intangible assets (2) |
|
|
11,373 |
|
|
|
11,713 |
|
|
|
11,252 |
|
|
|
22,625 |
|
|
|
23,382 |
|
Restructuring charges |
|
|
26 |
|
|
|
304 |
|
|
|
25 |
|
|
|
51 |
|
|
|
833 |
|
Executive transition costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
Non-GAAP income from operations |
|
$ |
62,856 |
|
|
$ |
58,060 |
|
|
$ |
43,719 |
|
|
$ |
106,576 |
|
|
$ |
84,612 |
|
Non-GAAP operating margin |
|
|
28.3 |
% |
|
|
26.5 |
% |
|
|
20.8 |
% |
|
|
24.6 |
% |
|
|
20.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (GAAP) |
|
$ |
34,382 |
|
|
$ |
25,828 |
|
|
$ |
21,835 |
|
|
$ |
56,217 |
|
|
$ |
22,149 |
|
Share-based compensation expense (1) |
|
|
13,865 |
|
|
|
13,557 |
|
|
|
17,965 |
|
|
|
31,830 |
|
|
|
33,516 |
|
Amortization of acquired intangible assets (2) |
|
|
11,373 |
|
|
|
11,713 |
|
|
|
11,252 |
|
|
|
22,625 |
|
|
|
23,382 |
|
Restructuring charges |
|
|
26 |
|
|
|
304 |
|
|
|
25 |
|
|
|
51 |
|
|
|
833 |
|
Executive transition costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
Income tax adjustments (4) |
|
|
(6,894 |
) |
|
|
(6,336 |
) |
|
|
(12,517 |
) |
|
|
(19,411 |
) |
|
|
(11,048 |
) |
Non-GAAP net income |
|
$ |
52,752 |
|
|
$ |
45,066 |
|
|
$ |
38,560 |
|
|
$ |
91,312 |
|
|
$ |
69,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income per share - diluted (GAAP) |
|
$ |
0.47 |
|
|
$ |
0.35 |
|
|
$ |
0.29 |
|
|
$ |
0.76 |
|
|
$ |
0.30 |
|
Share impact of non-GAAP adjustments identified above |
|
|
0.24 |
|
|
|
0.27 |
|
|
|
0.23 |
|
|
|
0.47 |
|
|
|
0.65 |
|
Non-GAAP net income per share - diluted |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
0.52 |
|
|
$ |
1.23 |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares used in computing non-GAAP net income per share - diluted |
|
|
73,937 |
|
|
|
72,917 |
|
|
|
74,597 |
|
|
|
74,234 |
|
|
|
73,130 |
|
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 |
|
|
Six Months Ended |
|
|||||||||||
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||||||||
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||||
(1) |
Share-based compensation expense included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of product revenue |
|
$ |
289 |
|
|
$ |
297 |
|
|
$ |
403 |
|
|
$ |
693 |
|
|
$ |
710 |
|
|
Cost of service revenue |
|
|
2,008 |
|
|
|
1,930 |
|
|
|
2,714 |
|
|
|
4,723 |
|
|
|
4,677 |
|
|
Research and development |
|
|
3,864 |
|
|
|
3,990 |
|
|
|
5,310 |
|
|
|
9,173 |
|
|
|
9,522 |
|
|
Sales and marketing |
|
|
4,712 |
|
|
|
4,672 |
|
|
|
6,242 |
|
|
|
10,953 |
|
|
|
11,562 |
|
|
General and administrative |
|
|
2,992 |
|
|
|
2,668 |
|
|
|
3,296 |
|
|
|
6,288 |
|
|
|
7,045 |
|
|
Total share-based compensation expense |
|
$ |
13,865 |
|
|
$ |
13,557 |
|
|
$ |
17,965 |
|
|
$ |
31,830 |
|
|
$ |
33,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(2) |
Amortization expense related to acquired software and product technology, tradenames, customer relationships included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of product revenue |
|
$ |
372 |
|
|
$ |
551 |
|
|
$ |
372 |
|
|
$ |
744 |
|
|
$ |
1,101 |
|
|
Cost of service revenue |
|
|
405 |
|
|
|
— |
|
|
|
270 |
|
|
|
675 |
|
|
|
— |
|
|
Operating expenses |
|
|
10,596 |
|
|
|
11,162 |
|
|
|
10,610 |
|
|
|
21,206 |
|
|
|
22,281 |
|
|
Total amortization expense |
|
$ |
11,373 |
|
|
$ |
11,713 |
|
|
$ |
11,252 |
|
|
$ |
22,625 |
|
|
$ |
23,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(3) |
Executive transition costs included in these amounts is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
General and administrative |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
959 |
|
|
Total executive transition costs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(4) |
Total income tax adjustment included in this amount is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Tax effect of non-GAAP adjustments above |
|
$ |
(6,894 |
) |
|
$ |
(6,336 |
) |
|
$ |
(12,517 |
) |
|
$ |
(19,411 |
) |
|
$ |
(11,048 |
) |
|
Total income tax adjustments |
|
$ |
(6,894 |
) |
|
$ |
(6,336 |
) |
|
$ |
(12,517 |
) |
|
$ |
(19,411 |
) |
|
$ |
(11,048 |
) |
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures -
Adjusted EBITDA
(In thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (GAAP) |
|
$ |
34,382 |
|
|
$ |
25,828 |
|
|
$ |
21,835 |
|
|
$ |
56,217 |
|
|
$ |
22,149 |
|
Net income (GAAP) as a % of revenue |
|
|
15.5 |
% |
|
|
11.8 |
% |
|
|
10.4 |
% |
|
|
13.0 |
% |
|
|
5.5 |
% |
Share-based compensation expense (1) |
|
|
13,865 |
|
|
|
13,557 |
|
|
|
17,965 |
|
|
|
31,830 |
|
|
|
33,516 |
|
Amortization of acquired intangible assets (2) |
|
|
11,373 |
|
|
|
11,713 |
|
|
|
11,252 |
|
|
|
22,625 |
|
|
|
23,382 |
|
Restructuring charges |
|
|
26 |
|
|
|
304 |
|
|
|
25 |
|
|
|
51 |
|
|
|
833 |
|
Executive transition costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
959 |
|
Income tax adjustments (4) |
|
|
(6,894 |
) |
|
|
(6,336 |
) |
|
|
(12,517 |
) |
|
|
(19,411 |
) |
|
|
(11,048 |
) |
Net income non-GAAP |
|
$ |
52,752 |
|
|
$ |
45,066 |
|
|
$ |
38,560 |
|
|
$ |
91,312 |
|
|
$ |
69,791 |
|
Interest and other (income) expense, net GAAP |
|
|
(3,084 |
) |
|
|
1,104 |
|
|
|
(4,481 |
) |
|
|
(7,564 |
) |
|
|
(2,632 |
) |
Depreciation and amortization excluding amortization of acquired intangible assets |
|
|
3,655 |
|
|
|
2,641 |
|
|
|
3,186 |
|
|
|
6,841 |
|
|
|
5,429 |
|
Income tax expense non-GAAP |
|
|
13,188 |
|
|
|
11,890 |
|
|
|
9,640 |
|
|
|
22,828 |
|
|
|
17,453 |
|
Adjusted EBITDA |
|
$ |
66,511 |
|
|
$ |
60,701 |
|
|
$ |
46,905 |
|
|
$ |
113,417 |
|
|
$ |
90,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA as a % of revenue |
|
|
29.9 |
% |
|
|
27.7 |
% |
|
|
22.3 |
% |
|
|
26.2 |
% |
|
|
22.2 |
% |
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 |
|
Revenue |
|
$ |
859.5 |
|
|
~$885 million to ~$915 million |
|
|
|
|
|
|
|
|
|
FY'26 |
|
|
FY'27 |
|
GAAP net income |
|
$ |
95.5 |
|
|
~$115 million to ~$126 million |
Amortization of intangible assets |
|
|
46.8 |
|
|
~$46 million |
Share-based compensation expenses |
|
|
59.9 |
|
|
~$55 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 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