[Overview and Management Commentary](index=1&type=section&id=Overview%20and%20Management%20Commentary) CEO Anil Singhal announced a solid start to fiscal year 2026, with Q1 growth driven by Cybersecurity and Service Assurance, focusing on product innovation and margin improvement [CEO Remarks](index=1&type=section&id=CEO%20Remarks) CEO Anil Singhal announced a solid start to fiscal year 2026, with Q1 growth driven by Cybersecurity and Service Assurance, focusing on product innovation and margin improvement - The company delivered a solid start to fiscal year 2026, with growth in its Cybersecurity and Service Assurance product lines[2](index=2&type=chunk) - Strategic priorities include driving product innovation, achieving annual revenue growth, and enhancing margins via cost management[3](index=3&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) NETSCOUT reported a 6.9% YoY revenue increase to $186.7 million in Q1 FY2026, significantly reducing GAAP net loss and growing non-GAAP net income and EPS [Q1 FY26 Financial Results](index=1&type=section&id=Q1%20FY26%20Financial%20Results) NETSCOUT reported a 6.9% YoY revenue increase to $186.7 million in Q1 FY2026, significantly reducing GAAP net loss and growing non-GAAP net income and EPS [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Total revenue grew 6.9% YoY to $186.7 million, primarily driven by a 19.3% increase in product revenue, with service revenue remaining flat and product backlog significantly increasing Q1 Revenue Performance (in millions) | Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$186.7** | **$174.6** | **+6.9%** | | Product Revenue | $73.0 | $61.2 | +19.3% | | Service Revenue | $113.8 | $113.4 | +0.3% | - Total product backlog increased significantly to **$30.9 million** as of June 30, 2025, compared to **$15.3 million** a year prior[5](index=5&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) GAAP loss from operations narrowed dramatically to $6.6 million due to the absence of a prior-year goodwill impairment, while non-GAAP income from operations nearly doubled to $26.6 million Q1 Profitability Metrics (in millions, except per share data) | Metric | Q1 FY2026 (GAAP) | Q1 FY2025 (GAAP) | Q1 FY2026 (Non-GAAP) | Q1 FY2025 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Income (Loss) from Operations | $(6.6) | $(463.3) | $26.6 | $14.0 | | Operating Margin | (3.5)% | (265.4)% | 14.2% | 8.0% | | Net Income (Loss) | $(3.7) | $(443.4) | $24.7 | $20.6 | | Diluted EPS | $(0.05) | $(6.20) | $0.34 | $0.28 | - The significant reduction in GAAP loss from operations was mainly due to the absence of the **$427.0 million** goodwill impairment charge recorded in Q1 FY2025[7](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) NETSCOUT's cash and marketable securities increased to $543.5 million as of June 30, 2025, with the company repurchasing $15.0 million in stock and maintaining zero debt - Cash, cash equivalents, and marketable securities increased to **$543.5 million** as of June 30, 2025, from **$492.5 million** as of March 31, 2025[9](index=9&type=chunk) - Repurchased **761,249 shares** of common stock for an aggregate price of approximately **$15.0 million** during the quarter[9](index=9&type=chunk) - The company had no debt outstanding under its **$600 million** revolving credit facility as of the quarter's end[9](index=9&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) NETSCOUT reaffirmed its full-year fiscal 2026 guidance, projecting revenue between $825 million and $865 million, along with specific GAAP and non-GAAP diluted EPS ranges [Fiscal Year 2026 Outlook](index=2&type=section&id=Fiscal%20Year%202026%20Outlook) NETSCOUT reaffirmed its full-year fiscal 2026 guidance, projecting revenue between $825 million and $865 million, along with specific GAAP and non-GAAP diluted EPS ranges FY2026 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Revenue | $825 million to $865 million | | GAAP Net Income per Share (diluted) | $1.07 to $1.22 | | Non-GAAP Net Income per Share (diluted) | $2.25 to $2.40 | [Recent Developments](index=3&type=section&id=Recent%20Developments) NETSCOUT completed a foreign investment sale and rolled out significant AI-backed enhancements to its Arbor DDoS and Omnis Cyber Intelligence solutions, improving threat detection capabilities [Corporate and Product Updates](index=3&type=section&id=Corporate%20and%20Product%20Updates) NETSCOUT completed a foreign investment sale and rolled out significant AI-backed enhancements to its Arbor DDoS and Omnis Cyber Intelligence solutions, improving threat detection capabilities - Completed the sale of a foreign investment for approximately **$12 million** on August 4, 2025[11](index=11&type=chunk) - Announced new AI-backed enhancements to its Arbor DDoS solutions to automate defense, capable of mitigating up to **80%** of all DDoS attacks without further analysis[13](index=13&type=chunk) - Introduced Adaptive Threat Analytics for its Omnis Cyber Intelligence Network Detection and Response (NDR) solution to improve incident response and reduce risk[13](index=13&type=chunk) - Participated in TM Forum's NeuroNOC Catalyst event, deploying its Omnis AI Insights Solution to demonstrate AI-driven operations for 5G networks[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) This section provides detailed unaudited financial statements, including condensed consolidated statements of operations, balance sheets, and comprehensive reconciliations of GAAP to non-GAAP measures [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section provides the detailed unaudited income statement for the three months ended June 30, 2025, highlighting revenues, costs, and operating expenses, notably the absence of a goodwill impairment charge in FY2026 Condensed Consolidated Statements of Operations (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $186,747 | $174,565 | | Gross profit | $143,325 | $130,196 | | Total operating expenses | $149,889 | $593,520 | | Loss from operations | $(6,564) | $(463,324) | | Net loss | $(3,679) | $(443,376) | | Diluted net loss per share | $(0.05) | $(6.20) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's balance sheet as of June 30, 2025, detailing assets, liabilities, and stockholders' equity, showing a slight decrease in total assets and liabilities over the quarter Consolidated Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash, cash equivalents, marketable securities and investments | $532,509 | $491,473 | | Total current assets | $683,915 | $713,184 | | Total assets | $2,157,426 | $2,186,578 | | Total current liabilities | $386,982 | $407,932 | | Total liabilities | $609,875 | $626,183 | | Total stockholders' equity | $1,547,551 | $1,560,395 | [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for key metrics and the full-year FY2026 outlook, detailing adjustments like share-based compensation and amortization Q1 FY26 Reconciliation of GAAP Loss from Operations to Non-GAAP Income from Operations (in thousands) | Description | Amount | | :--- | :--- | | **Loss from Operations (GAAP)** | **$(6,564)** | | Share-based compensation expense | $19,959 | | Amortization of acquired intangible assets | $11,669 | | Restructuring charges | $529 | | Executive Transition Costs | $959 | | Other adjustments | $12 | | **Non-GAAP Income from Operations** | **$26,564** | FY2026 Outlook Reconciliation of GAAP to Non-GAAP Net Income (in millions) | Description | Amount | | :--- | :--- | | **GAAP net income** | **~$79 to ~$90** | | Total adjustments (Amortization, Share-based comp, etc.) | ~$111 | | Related impact of adjustments on income tax | (~$23) | | **Non-GAAP net income** | **~$167 to ~$178** |

Core Insights - NETSCOUT has been recognized as the 2025 technology leader in the SPARK Matrix™ for Network Observability by QKS Group, marking its second consecutive year in this position [1][3]. Company Overview - NETSCOUT SYSTEMS, INC. specializes in protecting connected environments from cyberattacks and performance disruptions through its advanced visibility platform, which utilizes deep packet inspection technology [4]. Technology and Innovation - The nGeniusONE platform by NETSCOUT provides deep protocol-level intelligence and real-time visibility across hybrid and multi-cloud environments, enhancing IT operations teams' ability to proactively manage performance issues [3]. - Innovations such as Notification Center 2.0 and Omnis AI Insights contribute to NETSCOUT's capability to deliver predictive and scalable observability tailored for modern infrastructures [3]. Market Positioning - The QKS Group SPARK Matrix™ offers a comprehensive analysis of global market dynamics, vendor landscape, and competitive positioning, helping users evaluate vendor capabilities and market positions [2][6]. - NETSCOUT received strong ratings in technology excellence and customer impact within the SPARK Matrix™ analysis [6].

Core Insights - NETSCOUT has been recognized as a leader in the SPARK Matrix™ for Distributed Denial of Service (DDoS) Mitigation in 2025 by QKS Group, highlighting its innovative technology and market leadership [1][3]. Company Overview - NETSCOUT SYSTEMS, INC. specializes in protecting against cyberattacks and ensuring performance and availability through its visibility platform and deep packet inspection technology [4]. - The company serves a diverse clientele, including large enterprises, service providers, and public sector organizations [4]. Technology and Solutions - NETSCOUT offers AI and machine learning-enabled DDoS security through its Arbor suite, providing flexibility in deployment options such as hybrid, cloud, and on-premise [2]. - The company's DDoS protection is characterized as adaptive and intelligent, utilizing superior threat intelligence to respond to evolving threats in real-time [3]. Market Analysis - The QKS Group SPARK Matrix™ provides a comprehensive analysis of the global market dynamics, major trends, and competitive positioning of DDoS Mitigation providers [2][6]. - NETSCOUT received strong ratings for technology excellence and customer impact within the competitive landscape of DDoS Mitigation solutions [6].

Core Viewpoint - NetScout Systems (NASDAQ: NTCT) is identified as a company with strong growth prospects due to its solid foundations in high-margin recurring revenue, operations, leadership, and cost management [1]. Company Analysis - The company has a robust business model characterized by high-margin recurring revenue, which is essential for sustainable growth [1]. - Leadership and operational efficiency are highlighted as key strengths that contribute to the company's positive outlook [1]. - Cost management practices are noted as a significant factor in maintaining profitability and supporting growth initiatives [1]. Analyst Background - The analyst has a strong foundation in financial modeling, valuation, and data analysis, holding certifications such as FMVA and BIDA from the Corporate Finance Institute [1]. - There is a focus on technology, infrastructure, and internet services sectors, emphasizing companies with strong fundamentals and growth potential [1]. - The analyst aims to provide value to readers and investors interested in long-term investing strategies [1].

Financial Condition and Debt Management - The company has a five-year $600.0 million senior secured revolving credit facility, with no amounts outstanding as of the report date [121]. - The company may incur significantly more debt in the future, which could increase risks related to liquidity and financial condition [122]. - Future success may depend on the ability to obtain additional financing, which could be affected by market conditions and credit rating downgrades [123]. - Existing cash, cash equivalents, and bank credit facilities are expected to be sufficient to meet ongoing cash requirements [124]. - The company may seek to raise capital through issuing additional common stock, acquiring bank debt, or issuing debt securities [125]. Competition and Human Resources - The company faces intense competition for qualified personnel, which could hinder business management and growth [126]. - Effective succession planning is crucial, with key executive retirements announced for May 2025 [128]. - The company faces significant competition in technology markets, which could lead to pricing pressure and reduced profit margins [132]. - Acquisitions may not be successfully completed or integrated, potentially harming competitive ability and operating results [130]. Regulatory and Compliance Risks - The company is subject to evolving ESG regulations, which could impact reputation and financial performance [129]. - The company faces significant challenges in transferring personal information from Europe due to stringent data localization requirements, which could lead to operational disruptions and increased regulatory exposure [144]. - Compliance with data privacy and security laws is critical, and any failure could result in government enforcement actions, litigation, and reputational damage [147]. - A material portion of the company's revenue is derived from international sales, necessitating strict adherence to anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act [148]. Taxation and Currency Risks - The company's effective tax rate may fluctuate due to various factors, potentially increasing income tax expenses and adversely affecting net income [156]. - Foreign currency exchange rates significantly impact the company's financial results, as a substantial portion of revenue is generated outside the U.S. [160]. - The company employs hedging strategies to mitigate foreign exchange risks, but these may not fully protect against fluctuations, especially amid geopolitical tensions [161]. - Changes in taxation, trade, and tariffs could materially affect the company's financial condition and results of operations [158]. Market Volatility and Performance Guidance - The company's stock price is subject to volatility due to various external factors, including market conditions and competitive developments [166]. - The company may face significant costs and resource diversion if involved in securities litigation following periods of market volatility [167]. - The company’s guidance regarding future performance is inherently speculative and may not materialize as projected, leading to potential discrepancies in actual results [154]. Interest Rate and Investment Management - The company maintains a diversified portfolio of cash, cash equivalents, and investments to minimize interest rate risk, with no material exposure to changes in fair value due to interest rate fluctuations [297]. - Declines in interest rates would reduce future interest income, but a 10% increase or decrease in overall interest rates would not materially impact operating results [297]. - The cash equivalents and marketable securities primarily consist of U.S. government and municipal obligations, corporate bonds, commercial paper, certificates of deposit, and money market instruments [298]. Foreign Currency Management - As of March 31, 2025, the company had foreign currency forward contracts with notional amounts totaling $10.6 million, resulting in a liability balance of $55 thousand and an asset balance of $197 thousand [301]. - The company engages in foreign currency hedging activities to limit exposure to movements in foreign currency exchange rates, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee [300]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's historical consolidated financial statements [301]. - The company limits credit exposure by evaluating the creditworthiness of financial institutions with which it invests, maintaining cash balances in excess of federally insured limits [299]. - As of March 31, 2024, the company had foreign currency forward contracts with notional amounts totaling $11.7 million, resulting in a liability balance of $74 thousand and an asset balance of $11 thousand [301]. - The company does not use derivative financial instruments for speculative trading purposes, focusing instead on risk management [300]. - The company reassesses its approach to managing currency rate fluctuations as international operations grow [301].

Financial Performance - Q4 FY25 & FY25 - Revenue for Q4 FY25 was $205 million, a 08% increase compared to $2034 million in Q4 FY24[17] - Full year FY25 revenue was $8227 million, a 08% decrease compared to $8295 million in FY24[17] - Non-GAAP gross profit margin for Q4 FY25 was 792%, compared to 772% in Q4 FY24[10] - Non-GAAP operating margin for Q4 FY25 was 231%, compared to 192% in Q4 FY24[10] - Non-GAAP EPS for Q4 FY25 was $052, compared to $055 in Q4 FY24[10] - Non-GAAP EPS for FY25 was $222, compared to $220 in FY24[10] Revenue Breakdown - FY25 - Cybersecurity revenue increased to $2898 million, representing 35% of total revenue, compared to $2718 million (33%) in FY24[19] - Service Assurance revenue decreased to $5329 million, representing 65% of total revenue, compared to $5576 million (67%) in FY24[19] - Revenue from Enterprise customers increased to $4717 million, representing 57% of total revenue, compared to $439 million (53%) in FY24[21] - Revenue from Service Provider customers decreased to $351 million, representing 43% of total revenue, compared to $3905 million (47%) in FY24[21] FY26 Outlook - The company anticipates FY26 revenue between $825 million and $865 million[28] - Non-GAAP diluted EPS is projected to be between $225 and $240[29]

Company Performance - NetScout Systems reported quarterly earnings of $0.52 per share, matching the Zacks Consensus Estimate, but down from $0.55 per share a year ago [1] - The company posted revenues of $204.99 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 3.71% and slightly up from $203.44 million year-over-year [2] - Over the last four quarters, NetScout has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Outlook - The immediate price movement of NetScout's stock will largely depend on management's commentary during the earnings call [3] - NetScout shares have declined approximately 2.1% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $182.06 million, and for the current fiscal year, it is $2.33 on revenues of $835.92 million [7] Industry Context - The Computer - Networking industry, to which NetScout belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests that the performance of stocks can be significantly influenced by the overall outlook of their respective industries [8]

Financial Data and Key Metrics Changes - For Q4 FY2025, revenue increased by 1% to approximately $205 million, while non-GAAP diluted earnings per share (EPS) was $0.52, down approximately 5% year over year [7][24] - For the full fiscal year 2025, revenue was approximately $823 million, essentially flat year over year, down less than 1% [8][25] - Non-GAAP EPS for FY2025 was $2.22, a 1% improvement over FY2024 [8][26] Business Line Data and Key Metrics Changes - Service assurance revenue declined approximately 4% year over year, partially due to the divestiture of the test optimization business [9][27] - Cybersecurity offerings delivered nearly 7% year-over-year revenue growth, driven by strong momentum within the enterprise customer vertical [11][27] Market Data and Key Metrics Changes - The enterprise customer vertical grew 7.5%, while the service provider customer vertical revenue decreased 10.1% [27] - For FY2025, 57% of total revenue came from the enterprise customer vertical, while 43% came from the service provider vertical [27][28] Company Strategy and Development Direction - The company plans to continue investing in innovation and deepen relationships with customers while leveraging mission-critical solutions to support evolving performance, availability, and security needs [15][14] - The long-term strategy remains unchanged, focusing on sustainable long-term success [15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding growth in the cybersecurity segment, despite broader economic uncertainties [13][14] - The company anticipates FY2026 revenue in the range of approximately $825 million to $865 million, with non-GAAP diluted EPS expected between $2.25 and $2.40 [32] Other Important Information - A leadership transition is occurring, with the current CEO and CFO retiring and being succeeded by the deputy CEO and deputy CFO [16][17] - The company ended FY2025 with $492.5 million in cash and cash equivalents, representing an increase of $68.4 million since the end of FY2024 [28][29] Q&A Session Summary Question: Impact of tariffs on customer sentiment and guidance - Management noted some delayed sales cycles and a "wait and see" approach from customers regarding timing of orders, but guidance accounts for these uncertainties [40] Question: Cybersecurity momentum and new products - Management highlighted that the service assurance business is evolving into a broader observability market, which presents opportunities for growth in both service assurance and cybersecurity segments [42] Question: Interest in software-only solutions - Management indicated that there is consistent demand for software solutions, with a focus on maintaining high margins despite growth challenges [50] Question: Impact of government and defense business on sales cycles - Management has not seen any significant impact from recent headlines but remains cautious about the contribution from federal business in FY2026 [53]

Financial Data and Key Metrics Changes - For the fourth quarter of fiscal year 2025, revenue increased by 1% to approximately $205 million, while non-GAAP diluted earnings per share was $0.52, down approximately 5% year over year [7][24] - For the full fiscal year 2025, revenue was approximately $823 million, essentially flat year over year, down less than 1% [8][25] - Non-GAAP EPS for the full fiscal year 2025 was $2.22, a 1% improvement over fiscal year 2024 [8][26] Business Line Data and Key Metrics Changes - Service assurance revenue declined approximately 4% year over year, partially due to the divestiture of the test optimization business [9][27] - Cybersecurity offerings delivered nearly 7% year over year revenue growth, driven by strong momentum within the enterprise customer vertical [11][27] Market Data and Key Metrics Changes - The enterprise customer vertical grew by 7.5%, while the service provider customer vertical revenue decreased by 10.1% [27] - 57% of total revenue came from the enterprise customer vertical, while 43% came from the service provider vertical [27][28] Company Strategy and Development Direction - The company plans to continue investing in innovation and deepen relationships with customers while leveraging mission-critical solutions to support evolving performance, availability, and security needs [14][13] - The long-term strategy remains unchanged, focusing on sustainable long-term success [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding growth in the cybersecurity offerings despite broader economic uncertainty [13][12] - The company expects fiscal year 2026 revenue to be in the range of approximately $825 million to $865 million, with non-GAAP diluted EPS expected between $2.25 and $2.40 [32] Other Important Information - A leadership transition was announced, with the current CEO and CFO retiring effective May 31, 2025, and successors appointed [16][17] - The company ended fiscal year 2025 with $492.5 million in cash and cash equivalents, representing an increase of $68.4 million since the end of fiscal year 2024 [28][29] Q&A Session Summary Question: Impact of tariffs on customer sentiment and guidance - Management noted some delayed sales cycles but indicated that guidance covers uncertainties, with a wait-and-see approach from customers regarding order timing [38][40] Question: Cybersecurity momentum and new product expectations - Management highlighted that the service assurance business is evolving into a broader observability market, which presents opportunities for growth in both service assurance and cybersecurity [41][43] Question: Interest in software-only solutions - Management confirmed a consistent demand for software solutions, with a focus on maintaining high margins despite growth challenges [50] Question: Contribution from government and defense business - Management indicated no significant impact from recent headlines on sales cycles, but noted that the pipeline remains a question mark for future contributions [52]

Revenue Performance - Total revenue for Q4 FY25 was $205.0 million, a slight increase from $203.4 million in Q4 FY24[5] - Product revenue for Q4 FY25 was $89.5 million, approximately 44% of total revenue, compared to $89.4 million in Q4 FY24[6] - Service revenue for Q4 FY25 was $115.5 million, approximately 56% of total revenue, compared to $114.0 million in Q4 FY24[7] - Full year FY25 total revenue was $822.7 million, down from $829.5 million in FY24[12] - The company anticipates FY26 revenue in the range of $825 million to $865 million[16] - Total revenue for the three months ended March 31, 2025, was $204.987 million, a slight increase from $203.443 million in the same period of 2024[28] - Revenue for the three months ended March 31, 2025, was $204.987 million, a slight increase from $203.443 million in the same period of 2024[32] - FY'25 revenue is reported at $822.7 million, with FY'26 projected revenue between $825 million and $865 million[38] Profitability and Income - GAAP income from operations for Q4 FY25 was $19.9 million, a significant improvement from a loss of $37.0 million in Q4 FY24[8] - Non-GAAP income from operations for Q4 FY25 was $47.3 million, with a non-GAAP operating margin of 23.1%, compared to $39.0 million and 19.2% in Q4 FY24[8] - Non-GAAP net income for FY25 was $160.4 million, or $2.22 per share, compared to $159.1 million, or $2.20 per share, in FY24[13] - Net income for the three months ended March 31, 2025, was $18.617 million, a recovery from a net loss of $32.419 million in the same period of 2024[28] - Basic net income per share for the three months ended March 31, 2025, was $0.26, compared to a loss of $0.46 per share in the same period of 2024[28] - Non-GAAP Income from Operations for the twelve months ended March 31, 2025, was $195.115 million, up from $187.052 million in the previous year, indicating a growth of 4.4%[32] - Non-GAAP Net Income for the twelve months ended March 31, 2025, was $160.426 million, slightly up from $159.110 million in the previous year[32] - GAAP net loss (GAAP) for FY25 was $366.9 million, or $(5.12) per share, compared to a net loss of $147.7 million, or $(2.07) per share, in FY24[12] - GAAP net income (loss) per share (diluted) for FY'25 is $(5.12), with FY'26 expected to be between $1.07 and $1.22[38] - Non-GAAP net income per share (diluted) for FY'25 is $2.22, with FY'26 projected between $2.25 and $2.40[38] Expenses and Adjustments - Research and development expenses for the three months ended March 31, 2025, were $36.737 million, down from $43.558 million in the same period of 2024[28] - Share-based compensation expense for the three months ended March 31, 2025, totaled $14.199 million, down from $16.146 million in the same period of 2024[35] - Total adjustments for FY'25 amount to $563.8 million, with FY'26 adjustments expected to be around $110 million[38] - Amortization of intangible assets for FY'25 is $50.4 million, with FY'26 expected to be around $47 million[38] - Restructuring charges for FY'25 are reported at $20.5 million, with FY'26 expected to be approximately $1 million[38] Balance Sheet and Cash Flow - Cash, cash equivalents, and marketable securities increased to $491.473 million as of March 31, 2025, from $423.133 million as of March 31, 2024[30] - Total assets decreased to $2.186 billion as of March 31, 2025, from $2.595 billion as of March 31, 2024[30] - Total liabilities decreased to $626.183 million as of March 31, 2025, from $703.237 million as of March 31, 2024[30] Operational Improvements - GAAP Operating Margin improved to 9.7% for the three months ended March 31, 2025, compared to a negative margin of (18.2)% in the same period of 2024[32] - Non-GAAP EBITDA from Operations for the three months ended March 31, 2025, was $50.286 million, representing 24.5% of revenue, compared to 21.1% in the same period of 2024[37] - The company reported a GAAP Income (Loss) from Operations of $19.886 million for the three months ended March 31, 2025, compared to a loss of $(36.976) million in the same period of 2024[36] - NETSCOUT enhanced its Arbor Threat Mitigation System with additional AI/ML functionality to better combat DDoS attacks, which have increased by 55% over the past four years[16] - The company remains focused on returning to revenue growth and investing in innovation despite broader economic uncertainties[24] Future Projections - GAAP net income is expected to be between $80 million and $91 million for FY'26[38] - Non-GAAP net income for FY'26 is projected between $168 million and $179 million[38] - Average weighted shares outstanding (diluted GAAP) for FY'25 is 71.6 million, projected to be around 74 million to 75 million for FY'26[38] - Average weighted shares outstanding (diluted Non-GAAP) for FY'25 is 72.2 million, with FY'26 expected to be around 74 million to 75 million[38]