NetScout(NTCT) - 2025 Q2 - Quarterly Results

Financial Performance - Total revenue for Q2 FY25 was $191.1 million, a decrease of 2.9% from $196.8 million in Q2 FY24[3] - Product revenue was $81.0 million, approximately 42% of total revenue, compared to $80.5 million (41%) in Q2 FY24[3] - Service revenue was $110.1 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 $191.1 million, a decrease of 2.3% compared to $196.8 million for the same period in 2023[27] - Product revenue for the quarter was $81.0 million, up 0.6% from $80.5 million year-over-year, while service revenue decreased by 5.0% to $110.1 million from $116.3 million[27] - Revenue for the three months ended September 30, 2024, was $191,108,000, 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 $9.0 million, or $0.13 per share, compared to $21.5 million, or $0.29 per share in Q2 FY24[6] - Non-GAAP net income for Q2 FY25 was $33.6 million, or $0.47 per share, down from $44.5 million, or $0.61 per share in Q2 FY24[6] - The company reported a net income of $9.0 million, down from $21.5 million in the same quarter last year, resulting in a diluted net income per share of $0.13[27] - Net Income (Loss) (GAAP) for the three months ended September 30, 2024, was $9,027,000, compared to $21,462,000 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 $44,541,000 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) million to $(359) million[37] - GAAP net loss per share (diluted) for FY'24 is projected at $(2.07), with FY'25 expected to be between $(5.22) and $(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 $19 million realized in FY25[14] - Operating expenses increased to $134.9 million from $127.5 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 $830 million[12] - The company projects FY'25 revenue to be in the range of $800 million to $830 million, compared to FY'24 revenue of $829.5 million[37] - Non-GAAP net income for FY'24 is expected to be $159.1 million, while FY'25 is projected to be between $153 million and $168 million[37] - Non-GAAP net income per share (diluted) for FY'24 is estimated at $2.20, with FY'25 projected between $2.10 and $2.30[37] Asset Management - Cash, cash equivalents, and marketable securities totaled $400.9 million as of September 30, 2024, down from $423.1 million at the end of the previous fiscal year[29] - Total assets decreased to $2.07 billion from $2.60 billion, primarily due to a reduction in goodwill and intangible assets[29] - Current liabilities decreased to $347.1 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 $426,967,000 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 $427 million[37] - The company reported a total adjustment of $336.7 million for FY'24, with FY'25 adjustments expected to be between $561 million and $562 million[37] Share-Based Compensation - Share-based compensation expense for the three months ended September 30, 2024, was $14,886,000, 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, compared to $38,289,000 for the same period in 2023[33]