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NetScout(NTCT) - 2025 Q2 - Quarterly Results
NTCTNetScout(NTCT)2024-10-24 11:34

Financial Performance - Total revenue for Q2 FY25 was 191.1million,adecreaseof2.9191.1 million, a decrease of 2.9% from 196.8 million in Q2 FY24[3] - Product revenue was 81.0million,approximately4281.0 million, approximately 42% of total revenue, compared to 80.5 million (41%) in Q2 FY24[3] - Service revenue was 110.1million,approximately58110.1 million, approximately 58% of total revenue, down from 116.3 million (59%) in Q2 FY24[4] - Total revenue for the quarter ended September 30, 2024, was 191.1million,adecreaseof2.3191.1 million, a decrease of 2.3% compared to 196.8 million for the same period in 2023[27] - Product revenue for the quarter was 81.0million,up0.681.0 million, up 0.6% from 80.5 million year-over-year, while service revenue decreased by 5.0% to 110.1millionfrom110.1 million from 116.3 million[27] - Revenue for the three months ended September 30, 2024, was 191,108,000,adecreaseof2.0191,108,000, a decrease of 2.0% compared to 196,802,000 for the same period in 2023[31] Net Income and Loss - GAAP net income for Q2 FY25 was 9.0million,or9.0 million, or 0.13 per share, compared to 21.5million,or21.5 million, or 0.29 per share in Q2 FY24[6] - Non-GAAP net income for Q2 FY25 was 33.6million,or33.6 million, or 0.47 per share, down from 44.5million,or44.5 million, or 0.61 per share in Q2 FY24[6] - The company reported a net income of 9.0million,downfrom9.0 million, down from 21.5 million in the same quarter last year, resulting in a diluted net income per share of 0.13[27]−NetIncome(Loss)(GAAP)forthethreemonthsendedSeptember30,2024,was0.13[27] - Net Income (Loss) (GAAP) for the three months ended September 30, 2024, was 9,027,000, compared to 21,462,000forthesameperiodin2023,reflectingadecreaseof58.021,462,000 for the same period in 2023, reflecting a decrease of 58.0%[31] - Non-GAAP Net Income for the three months ended September 30, 2024, was 33,562,000, down from 44,541,000intheprioryear,adeclineof24.644,541,000 in the prior year, a decline of 24.6%[33] - GAAP net loss for FY'24 is estimated at (147.7) million, with FY'25 projected net loss ranging from approximately (374)millionto(374) million to (359) million[37] - GAAP net loss per share (diluted) for FY'24 is projected at (2.07),withFY′25expectedtobebetween(2.07), with FY'25 expected to be between (5.22) and (5.01)[37]CostManagementandSavings−NETSCOUTinitiatedaVoluntarySeparationProgram(VSP)expectedtoreduceapproximately145employees,or6.3(5.01)[37] Cost Management and Savings - NETSCOUT initiated a Voluntary Separation Program (VSP) expected to reduce approximately 145 employees, or 6.3% of its workforce[13] - The VSP is anticipated to generate net annual run-rate savings of approximately 25 million, with 19millionrealizedinFY25[14]−Operatingexpensesincreasedto19 million realized in FY25[14] - Operating expenses increased to 134.9 million from 127.5millionyear−over−year,primarilyduetohighersalesandmarketingexpenses[27]−Thecompanyiscommittedtomanagingcostsprudentlywhilecontinuingtoinvestinproductdevelopmentandmarketexpansionstrategies[24]FutureProjections−ThecompanyexpectsFY25revenuetobeintherangeof127.5 million year-over-year, primarily due to higher sales and marketing expenses[27] - The company is committed to managing costs prudently while continuing to invest in product development and market expansion strategies[24] Future Projections - The company expects FY25 revenue to be in the range of 800 million to 830million[12]−ThecompanyprojectsFY′25revenuetobeintherangeof830 million[12] - The company projects FY'25 revenue to be in the range of 800 million to 830million,comparedtoFY′24revenueof830 million, compared to FY'24 revenue of 829.5 million[37] - Non-GAAP net income for FY'24 is expected to be 159.1million,whileFY′25isprojectedtobebetween159.1 million, while FY'25 is projected to be between 153 million and 168million[37]−Non−GAAPnetincomepershare(diluted)forFY′24isestimatedat168 million[37] - Non-GAAP net income per share (diluted) for FY'24 is estimated at 2.20, with FY'25 projected between 2.10and2.10 and 2.30[37] Asset Management - Cash, cash equivalents, and marketable securities totaled 400.9millionasofSeptember30,2024,downfrom400.9 million as of September 30, 2024, down from 423.1 million at the end of the previous fiscal year[29] - Total assets decreased to 2.07billionfrom2.07 billion from 2.60 billion, primarily due to a reduction in goodwill and intangible assets[29] - Current liabilities decreased to 347.1millionfrom347.1 million from 395.1 million, reflecting improved cash management and operational efficiency[29] Product Development - Recent product enhancements include AI-ready data solutions and updates to the nGenius Enterprise Performance Management solution[15] - The company plans to focus on cybersecurity and AI-related initiatives to enhance its market position and drive future growth[24] Impairments and Adjustments - The company reported a Goodwill impairment of 426,967,000forthethreemonthsendedJune30,2024[31]−GoodwillimpairmentforFY′24wasrecordedat426,967,000 for the three months ended June 30, 2024[31] - Goodwill impairment for FY'24 was recorded at 217.3 million, with FY'25 expected to be around 427million[37]−Thecompanyreportedatotaladjustmentof427 million[37] - The company reported a total adjustment of 336.7 million for FY'24, with FY'25 adjustments expected to be between 561millionand561 million and 562 million[37] Share-Based Compensation - Share-based compensation expense for the three months ended September 30, 2024, was 14,886,000,downfrom14,886,000, down from 18,445,000 in the same period last year, a reduction of 19.0%[33] - The total share-based compensation expense for the six months ended September 30, 2024, was 36,084,000,comparedto36,084,000, compared to 38,289,000 for the same period in 2023[33]