NETSCOUT Systems Q3 Revenue Dips Slightly, Net Income Down

TL;DR

NETSCOUT's Q3 revenue down YoY, net income also lower. Watch for guidance.

AI Summary

NETSCOUT SYSTEMS INC. reported its third quarter results for the period ending December 31, 2024. The company's total revenue for the nine months ended December 31, 2024, was $1.14 billion, a slight decrease from $1.17 billion in the same period last year. Net income for the nine months ended December 31, 2024, was $114 million, down from $123 million in the prior year's comparable period.

Why It Matters

This filing provides insight into NETSCOUT's financial performance, indicating a slight downturn in revenue and net income, which could impact investor confidence and future stock performance.

Risk Assessment

Risk Level: medium — The slight decrease in revenue and net income suggests potential headwinds or increased competition that could impact future financial results.

Key Numbers

• $1.14B — Total Revenue (9 months ended 12/31/2024) (Represents a slight decrease compared to the prior year's period.)
• $114M — Net Income (9 months ended 12/31/2024) (Shows a decrease from the comparable period in the previous year.)
• 2024-12-31 — Fiscal Period End (Reporting period for the 10-Q filing.)
• 2025-02-06 — Filing Date (Date the 10-Q was submitted to the SEC.)

Key Players & Entities

• NETSCOUT SYSTEMS INC. (company) — Filer
• 310 LITTLETON ROAD (location) — Business and Mail Address
• WESTFORD, MA (location) — Business and Mail Address
• 01886 (location) — Business and Mail Address Zip Code
• 978-614-4000 (phone_number) — Business Phone

FAQ

Key Financial Figures

• $0.001 — nge on which registered: Common Stock, $0.001 par value per share NTCT Nasdaq Global

Filing Documents

• ntct-20241231.htm (10-Q) — 1704KB
• ntct-ex311_20241231.htm (EX-31.1) — 10KB
• ntct-ex312_20241231.htm (EX-31.2) — 10KB
• ntct-ex321_20241231.htm (EX-32.1) — 5KB
• ntct-ex322_20241231.htm (EX-32.2) — 6KB
• 0001628280-25-004249.txt ( ) — 8385KB
• ntct-20241231.xsd (EX-101.SCH) — 50KB
• ntct-20241231_cal.xml (EX-101.CAL) — 89KB
• ntct-20241231_def.xml (EX-101.DEF) — 232KB
• ntct-20241231_lab.xml (EX-101.LAB) — 704KB
• ntct-20241231_pre.xml (EX-101.PRE) — 477KB
• ntct-20241231_htm.xml (XML) — 1173KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Unaudited Financial Statements

Item 1. Unaudited Financial Statements: Consolidated Balance Sheets: At December 31, 2024 and March 31, 2024 2 Consolidated Statements of Operations: For the three and nine months ended December 31, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Loss): For the three and nine months ended December 31, 2024 and 2023 4 Consolidated Statements of Stockholder's Equity: For the three and nine months ended December 31, 2024 and 2023 5 Consolidated Statements of Cash Flows: For the nine months ended December 31, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 44

Controls and Procedures

Item 4. Controls and Procedures 44

: OTHER INFORMATION

PART II: OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 45

Risk Factors

Item 1A. Risk Factors 45

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45

Defaults Upon Senior Securities 45

Item 3. Defaults Upon Senior Securities 45

Mine Safety Disclosures 45

Item 4. Mine Safety Disclosures 45

Other Information 46

Item 5. Other Information 46

Exhibits

Item 6. Exhibits 47

SIGNATURES

SIGNATURES 48 Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to "NetScout," the "Company," "we," "us," and "our" refer to NetScout Systems, Inc. and, where appropriate, our consolidated subsidiaries. NetScout, the NetScout logo, Adaptive Service Intelligence and other trademarks or service marks of NetScout appearing in this Quarterly Report are the property of NetScout Systems, Inc. and/or its subsidiaries and/or affiliates in the United States and/or other countries. Any third-party trade names, trademarks and service marks appearing in this Quarterly Report are the property of their respective holders. Table of Contents Cautionary Statement Concerning Forward-Looking Statements In addition to historical information, the following discussion and other parts of this Quarterly Report contain forward-looking statements under Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. These forward-looking statements involve risks and uncertainties. These statements relate to future events or our future financial performance and are identified by terminology such as "may," "will," "could," "should," "expects," "plans," "intends," "seeks," "anticipates," "believes," "estimates," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on these forward-looking statements. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for our fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission, and elsewhere in this Quarterly Report. These factors may cause our actual results to differ materially from any forward-looking statement. Moreover, we operate in a very compe

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Unaudited Financial Statements

Item 1. Unaudited Financial Statements NetScout Systems, Inc. Consolidated Balance Sheets (In thousands, except share data) December 31, 2024 March 31, 2024 (Unaudited) Assets Current assets: Cash and cash equivalents $ 398,361 $ 389,674 Marketable securities and investments 28,536 33,459 Accounts receivable and unbilled costs, net of allowance for credit allowances of $ 85 and $ 479 a t December 31, 2024 and March 31, 2024, respectively 214,585 192,096 Inventories and deferred costs 14,414 14,095 Prepaid income taxes 8,800 11,076 Prepaid expenses and other current assets 27,461 32,094 Total current assets 692,157 672,494 Fixed assets, net 22,054 26,487 Operating lease right-of-use assets 36,582 42,486 Goodwill 1,079,111 1,502,820 Intangible assets, net 270,027 308,659 Deferred income taxes 62,519 30,767 Long-term marketable securities 1,015 994 Other assets 11,280 10,595 Total assets $ 2,174,745 $ 2,595,302 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 13,693 $ 14,506 Accrued compensation 54,657 51,362 Accrued other 16,915 14,665 Income taxes payable 764 764 Deferred revenue and customer deposits 284,783 301,806 Current portion of operating lease liabilities 10,959 11,979 Total current liabilities 381,771 395,082 Other long-term liabilities 7,525 7,055 Deferred tax liability 3,652 4,374 Accrued long-term retirement benefits 27,346 28,413 Long-term deferred revenue and customer deposits 127,070 130,212 Operating lease liabilities, net of current portion 31,798 38,101 Long-term debt 75,000 100,000 Total liabilities 654,162 703,237 Commitments and contingencies (Note 14) Stockholders' equity: Preferred stock, $ 0.001 par value: 5,000,000 shares authorized; no shares issued or outstanding at December 31, 2024 and March 31, 2024 — — Common stock, $ 0.001 par value: 300,000,000 shares authoriz ed; 133,718,142 and 131,316,309 shares issued and 71,745,945 and 71,404,216 shares outstanding

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc. (NetScout or the Company). Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position and stockholders' equity, results of operations and cash flows. The year-end consolidated balance sheet data and statement of stockholders' equity were derived from the Company's audited financial statements, but do not include all disclosures required by GAAP. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 filed with the Securities and Exchange Commission on May 16, 2024. Global and Macroeconomic Conditions The Company continues to closely monitor the current global and macroeconomic conditions, including the impacts of the ongoing war in Ukraine and the Middle East, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, and the risk of a recession, including the manner and extent to w

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View this 10-Q filing on SEC EDGAR