NetScout(NTCT) - 2026 Q2 - Quarterly Results

Revenue Performance - Total revenue for Q2 FY26 increased to $219.0 million, up 14.6% from $191.1 million in Q2 FY25[4] - Product revenue for Q2 FY26 was $94.7 million, approximately 43% of total revenue, compared to $81.0 million or 42% in Q2 FY25[5] - Service revenue for Q2 FY26 was $124.3 million, approximately 57% of total revenue, compared to $110.1 million or 58% in Q2 FY25[6] - Total revenue for the three months ended September 30, 2025, was $219.017 million, a 14.6% increase from $191.108 million in the same period of 2024[25] - Product revenue increased to $94.712 million, up 16.8% from $81.033 million year-over-year, while service revenue rose to $124.305 million, a 12.9% increase from $110.075 million[25] Profitability Metrics - GAAP income from operations for Q2 FY26 was $32.5 million, with an operating margin of 14.8%, compared to $14.1 million and 7.4% in Q2 FY25[7] - Non-GAAP net income for Q2 FY26 was $45.1 million, or $0.62 per share, compared to $33.6 million, or $0.47 per share in Q2 FY25[8] - Gross profit for the three months ended September 30, 2025, was $175.407 million, representing a gross margin of 80.0%, compared to $149.051 million and a margin of 77.9% in the prior year[25][28] - Net income for the three months ended September 30, 2025, was $25.828 million, compared to $9.027 million in the same period of 2024, resulting in a diluted net income per share of $0.35[25][28] - Non-GAAP net income for the three months ended September 30, 2025, was $45.077 million, compared to $33.562 million in the same period of 2024, with a non-GAAP diluted net income per share of $0.62[28] Cash and Assets - Cash and marketable securities as of September 30, 2025, were $526.9 million, up from $492.5 million as of March 31, 2025[9] - Cash, cash equivalents, and marketable securities increased to $516.863 million as of September 30, 2025, up from $491.473 million at the end of the previous fiscal year[27] - Total assets decreased slightly to $2.176 billion as of September 30, 2025, from $2.187 billion as of March 31, 2025[27] Financial Outlook - The company raised its revenue outlook for FY26 to a range of $830 million to $870 million, up from the previous range of $825 million to $865 million[12] - GAAP net income per share (diluted) outlook for FY26 is now expected to be in the range of $1.13 to $1.23, compared to the previous range of $1.07 to $1.22[12] - The company expects FY'25 revenue to be approximately $822.7 million, with FY'26 projected revenue ranging from $830 million to $870 million[33] - GAAP net income (loss) for FY'25 is projected at $(366.9) million, while FY'26 is expected to be between $83 million and $90 million[33] - Non-GAAP net income for FY'25 is estimated at $160.4 million, with FY'26 expected to be between $171 million and $178 million[33] Operational Efficiency - Operating expenses totaled $142.921 million for the three months ended September 30, 2025, an increase from $134.928 million in the same period of 2024[25] - Non-GAAP income from operations for the three months ended September 30, 2025, was $58.071 million, up from $44.067 million in the prior year, indicating a significant increase in operational efficiency[32] - Non-GAAP EBITDA from operations for the three months ended September 30, 2025, was $60.701 million, representing 27.7% of revenue, compared to $47.518 million (24.9%) in the same period of 2024[32] Strategic Initiatives - NETSCOUT showcased new solutions at the Engage Technology and User Summit, emphasizing AI-driven product innovation and customer reliance on curated data[3] - The company announced the availability of extended continuous end-to-end monitoring to enhance compliance and incident reporting capabilities[11] - NETSCOUT's strategic objectives include capturing new opportunities through differentiated solutions, although actual results may differ due to various risks and uncertainties[22] Restructuring and Expenses - The company incurred restructuring charges of $20.5 million in FY'25, with an expected reduction to approximately $1 million in FY'26[33] - The total share-based compensation expense for the six months ended September 30, 2025, was $19.959 million, down from $36.084 million in the same period of 2024[31] - The company reported a total amortization expense of $11.713 million for the three months ended September 30, 2025, compared to $12.638 million in the prior year[31]