NetScout : Fourth Quarter 2026 Earnings Release

Published: 2026-05-07 08:19:11 ET NTCT

Published on 05/07/2026 at 08:19 am EDT

Company Delivers Strong Fiscal Year 2026 Results and Achieves Key Strategic Objectives Fiscal Year 2027 Outlook Signals Continued Top- and Bottom-Line Growth

"We delivered strong fiscal year 2026 top- and bottom-line results, fueled by revenue growth across both our Cybersecurity and Service Assurance offerings, as we successfully navigate a dynamic macro environment. We achieved our key strategic objectives for the fiscal year by accelerating product innovation, driving annual revenue growth, and expanding margins, underscoring the strength of our strategy and the discipline of our execution.

"Looking ahead, we are excited about the year in front of us and are leaning into this momentum. We are committed to executing our strategy and driving continued innovation, sustained revenue growth, and further operating margin expansion. We see significant opportunities over the long term to leverage NETSCOUT's deep expertise in cybersecurity and network observability, together with our AI-ready data platform, to help customers advance their AI and digital transformation initiatives and to manage an increasingly complex digital environment where network performance, availability, and security are mission-critical."

Total revenue for the fourth quarter of fiscal year 2026 was $203.0 million, compared with $205.0 million for the fourth quarter of fiscal year 2025.

Product revenue for the fourth quarter of fiscal year 2026 was $80.7 million, or approximately 40% of total revenue for the period. This compares with product revenue of $89.5 million, or approximately 44% of total revenue, for the fourth quarter of fiscal year 2025. As of March 31, 2026, NETSCOUT had a total product backlog of approximately

$50 million, which includes $45.8 million of fulfillable backlog. This compares to product backlog of approximately

$33 million as of March 31, 2025, which included $25.1 million of fulfillable backlog.

Service revenue for the fourth quarter of fiscal year 2026 increased to $122.3 million, or approximately 60% of total revenue for the period. This compares with service revenue of $115.5 million, or approximately 56% of revenue, for the fourth quarter of fiscal year 2025.

NETSCOUT's GAAP income from operations was $19.6 million in the fourth quarter of fiscal year 2026. This compares with GAAP income from operations of $19.9 million in the fourth quarter of fiscal year 2025. The Company's GAAP operating margin was 9.6% in the fourth quarter of fiscal year 2026, versus 9.7% in the same period in fiscal year 2025. Non-GAAP income from operations was $43.9 million, with a non-GAAP operating margin of 21.6%. This compares to non-GAAP income from operations of $47.3 million with a non-GAAP operating margin of 23.1% in the fourth quarter of fiscal year 2025. A reconciliation of all GAAP and non-GAAP results are included in the financial tables below.

Net income (GAAP) for the fourth quarter of fiscal year 2026 was $18.2 million, or $0.25 per share (diluted), versus a GAAP net income of $18.6 million, or $0.25 per share (diluted), for the fourth quarter of fiscal year 2025. Non-GAAP net income was $38.5 million, or $0.52 per share (diluted), for the fourth quarter of fiscal year 2026, compared with $38.0 million, or $0.52 per share (diluted), for the fourth quarter of fiscal year 2025. Adjusted EBITDA in the fourth quarter of fiscal year 2026 was $46.4 million, or 22.9% of quarterly revenue for the period. This compares to adjusted EBITDA of $50.3 million in the fourth quarter of fiscal year 2025, or 24.5% of quarterly revenue for the period.

During the fourth quarter, NETSCOUT repurchased 1.0 million shares of its common stock for approximately $29 million. As of March 31, 2026, cash, cash equivalents, short and long-term marketable securities and investments increased to $705.1 million, compared with $492.5 million as of March 31, 2025. As of March 31, 2026, the Company had no debt outstanding under its $600 million revolving credit facility, which expires in October 2029.

Total revenue for fiscal year 2026 was $859.5 million, up from $822.7 million in fiscal year 2025.

Product revenue for fiscal year 2026 was $370.1 million, up from $359.9 million in fiscal year 2025.

Service revenue for fiscal year 2026 was $489.3 million, up from $462.8 million in fiscal year 2025.

NETSCOUT's income from operations (GAAP) for fiscal year 2026 was $109.8 million, with a GAAP operating margin of 12.8%. This compares with a loss from operations (GAAP) for fiscal year 2025 of $367.6 million, which included total non-cash goodwill charges of $427.0 million. Non-GAAP income from operations for fiscal year 2026 increased to $218.5 million, with a non-GAAP operating margin of 25.4%.

This compares with non-GAAP income from operations of $195.1 million and non-GAAP operating margin of 23.7% for fiscal year 2025.

NETSCOUT's net income (GAAP) for fiscal year 2026 was $95.5 million, or $1.30 per share (diluted). This compares with a net loss (GAAP) of $366.9 million, or $(5.12) per share (diluted), for fiscal year 2025, which includes the non-cash goodwill charged previously mentioned. Non-GAAP net income for fiscal year 2026 was $182.0 million, or $2.48 per share (diluted). This compares with non-GAAP net income of $160.4 million, or $2.22 per share (diluted), for fiscal year 2025. The Company's adjusted EBITDA for the fiscal year 2026 was $228.1 million, or 26.5% of total revenue, versus adjusted EBITDA of $208.4 million, or 25.3% of total revenue for fiscal year 2025.

During fiscal year 2026, NETSCOUT repurchased approximately 2.5 million shares of its common stock for an aggregate of approximately $60.8 million at an average price of $24.29 per share through its share repurchase program.

For fiscal year 2027, the Company is providing the following outlook, which reflects expected continued growth and margin expansion:

Revenue is expected to be in the range of $885.0 million to $915.0 million, which implies year-over-year growth at the midpoint of 4.7%.

GAAP net income per share (diluted) is expected to be in the range of $1.55 to $1.70. Non-GAAP net income per share (diluted) is expected to be in the range of $2.65 to $2.80, which implies year-over-year growth at the midpoint of 9.9%.

On May 1, 2026, NETSCOUT closed on its acquisition of the assets of DigiCert, Inc.'s DDoS protection business, which is immediately accretive and is expected to contribute approximately $20 million in annualized revenue; the impact is included in the Company's fiscal year 2027 outlook.

A reconciliation between GAAP and non-GAAP numbers for NETSCOUT's fiscal year 2027 outlook is included in the financial tables below.

In March, the Company released its second-half 2025 Distributed Denial-of-Service (DDoS) Threat Intelligence Report. NETSCOUT leverages passive internet vantage points to map the evolving DDoS landscape, providing unparalleled visibility into global attack trends. For more than 15 years, NETSCOUT has delivered trusted, consistent DDoS Intelligence based exclusively on directly observed, verifiable attack traffic. The report highlights that hyper-scale, coordinated threat activity continues to outpace global mitigation efforts, while the proliferation of DDoS-for-hire services is lowering barriers to entry and enabling a broader range of threat actors. At the same time, increasingly sophisticated reconnaissance and adaptive evasion techniques are challenging traditional defense models. As a result, the report underscores the need

for organizations to adopt intelligent, autonomous defense capabilities to effectively manage the growing risk of large-scale operational disruption.

In February, the Company announced the extension of its Omnis™ AI Insights solution to communications service providers (CSPs), delivering a critical data foundation for the adoption of agentic AI across customer experience and network operations. By transforming raw network data into AI-ready smart data, CSPs can deploy AI agents to enhance customer experience, enable predictive maintenance, and strengthen network security, driving greater operational efficiency, lower costs, and reduced risk.

Conference Call Instructions

NETSCOUT will host a conference call to discuss its fourth quarter and full fiscal year 2026 financial results and fiscal year 2027 financial outlook today at 8:30 a.m. ET. This call will be webcast live through NETSCOUT's website at https://ir.netscout.com/investors/overview/default.aspx. Alternatively, investors can listen to the call by dialing (800) 267-6316, or (203) 518-9783 for international callers. The conference call ID is NTCTQ426. A replay of the call will be available after 12:00 p.m. ET today for approximately one week. The number for the replay is (800) 839-0861, or (402) 220-0661 for international callers. An archived version of the webcast, press release and conference call remarks will be available on NETSCOUT's website for one year.

Use of Non-GAAP Financial Information

To supplement the financial measures presented in NETSCOUT's press release in accordance with accounting principles generally accepted in the United States (GAAP), NETSCOUT also reports the following non-GAAP measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted net income per share, and adjusted EBITDA. Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets, share-based compensation expense, and acquisition-related depreciation expense from gross profit (GAAP). Non-GAAP income from operations includes the aforementioned adjustments related to non-GAAP gross profit and also removes goodwill impairment charges, executive transition costs, and restructuring charges from income from operations (GAAP). Non-GAAP operating margin is non-GAAP income from operations expressed as a percentage of revenue. Non-GAAP net income includes the foregoing adjustments related to non-GAAP income from operations and also removes the income tax effects of such adjustments as well as any loss on extinguishment of debt from net income (GAAP). Non-GAAP diluted net income per share is non-GAAP net income divided by total outstanding shares on a diluted basis. Adjusted EBITDA includes the aforementioned adjustments related to non-GAAP net income and also removes interest and other expense, income taxes, and non-acquisition related depreciation from net income (GAAP). Beginning in the third quarter of fiscal year 2026, we have renamed non-GAAP EBITDA from operations to adjusted EBITDA. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures included in the attached tables within this press release.

These non-GAAP measures are not prepared in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (gross profit, income from operations, operating margin, net income, and diluted net income per share), and may have limitations because they do not reflect all NETSCOUT's results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate NETSCOUT's results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP. NETSCOUT believes these non-GAAP financial measures will enhance the reader's overall understanding of NETSCOUT's current financial performance and NETSCOUT's prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how the Company plans and measures its own business. NETSCOUT believes that providing these non-GAAP measures affords investors a view of NETSCOUT's operating results that may be more easily compared to peer companies and also enables investors to consider NETSCOUT's operating results on both a GAAP and non-GAAP basis during and following the integration period of NETSCOUT's acquisitions. Presenting the GAAP measures on their own, without the supplemental non-GAAP disclosures, might not be indicative of NETSCOUT's core operating results. Furthermore, NETSCOUT believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures provides useful information to management and investors regarding present and future business trends relating to its financial condition and results of operations.

NETSCOUT management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions. These non-GAAP measures are among the primary factors that management uses in planning and forecasting.

About NETSCOUT

NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT) is a leading provider of enterprise network observability, carrier service assurance, cybersecurity, and Distributed Denial-of-Service (DDoS) protection solutions. NETSCOUT protects the connected world from cyberattacks and performance and availability disruptions through the company's unique visibility platform and solutions powered by its pioneering deep packet inspection at scale technology. NETSCOUT serves the world's largest enterprises, service providers, and public sector organizations. Learn more at www.nets cout.com or follow @NETSCOUT on LinkedIn, X, or Facebook.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Examples of forward-looking statements include statements regarding our future financial performance or position, liquidity, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical fact. You can identify forward-looking statements by their use of forward-looking words such as "may," "will," "anticipate,"

"expect," "believe," "estimate," "intend," "plan," "should," "seek," or other comparable terms. Investors are cautioned that such forward-looking statements in this press release include, without limitation, statements regarding NETSCOUT's ability to leverage the strength of its AI-ready data platform to help customers advance their AI and digital transformation initiatives and to manage an increasingly complex digital environment; NETSCOUT's financial outlook and expectations; NETSCOUT's strategic objectives, plans, commitments, aspirations and goals. Actual results could differ materially from those indicated in the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors, including macroeconomic factors and slowdowns or downturns in economic conditions generally and in the market for advanced networks, service assurance and cybersecurity solutions specifically; the volatile foreign exchange environment; the Company's relationships with strategic partners and resellers; dependence upon broad-based acceptance of the Company's network performance management solutions; the presence of competitors with greater financial resources than the Company has, and their strategic response to the Company's products; the Company's ability to retain key executives and employees; the Company's ability to realize the anticipated savings from restructuring actions and other expense management programs; potential lower than expected demand for the Company's products and services; the Company's ability to recognize the expected gain from its acquisition of the assets of DigiCert, Inc.'s DDoS protection business; and the timing and magnitude of stock buyback activity based on market conditions, corporate considerations, debt agreements, and regulatory requirements. The risks included above are not exhaustive. For a more detailed description of the risk factors associated with the Company, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's filings with the Securities and Exchange Commission, including but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking information in this press release is as of the date of this press release, and NETSCOUT undertakes no obligation to update such information unless required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. NETSCOUT's financial guidance is based on estimates and assumptions that are subject to significant uncertainties.

©2026 NETSCOUT SYSTEMS, INC. All rights reserved. NETSCOUT and the NETSCOUT logo are registered trademarks or trademarks of NETSCOUT SYSTEMS, INC. and/or its subsidiaries and/or affiliates in the USA and/or other countries.

Scott Dressel Chris Lucas

VP, Corporate Finance AVP, Marketing & Corporate Communications 978-614-4000 978-614-4124

[email protected] [email protected]

Three Months Ended

Twelve Months Ended

March 31,

2026

2025

2026

2025

Revenue:

Product

80,736

89,517

370,145

359,894

Service

122,299

115,470

489,337

462,785

Total revenue

203,035

204,987

859,482

822,679

Cost of revenue:

Product

12,277

15,657

50,594

57,463

Service

31,650

30,040

126,394

121,272

Total cost of revenue

43,927

45,697

176,988

178,735

Gross profit

159,108

159,290

682,494

643,944

Operating expenses:

Research and development

39,768

36,737

159,461

152,864

Sales and marketing

63,626

66,562

264,538

268,051

General and administrative

24,936

23,917

103,185

96,724

Amortization of acquired intangible assets

11,165

11,583

44,602

46,440

Restructuring charges

605

883

20,500

Goodwill impairment

426,967

Total operating expenses

139,520

139,404

572,669

1,011,546

Income (loss) from operations

19,588

19,886

109,825

(367,602

)

Interest and other income (expense), net

3,758

(1,685

)

8,683

1,808

Income (loss) before income tax expense (benefit)

23,346

18,201

118,508

(365,794

)

Income tax expense (benefit)

5,106

(416

)

22,977

1,128

Net income (loss)

18,240

18,617

95,531

(366,922

)

Basic net income (loss) per share

0.25

0.26

1.33

(5.12

)

Diluted net income (loss) per share

0.25

1.30

(5.12

)

Weighted average common shares outstanding used in computing:

Net income (loss) per share - basic

71,915

71,862

71,984

71,627

Net income (loss) per share - diluted

74,171

73,410

73,355

71,627

March 31,

2026

2025

Assets

Current assets:

Cash, cash equivalents, marketable securities and investments

667,957

491,473

Accounts receivable and unbilled costs, net

151,473

163,654

Inventories and deferred costs

13,321

12,891

Prepaid expenses and other current assets

35,131

45,166

Total current assets

867,882

713,184

Fixed assets, net

23,558

21,529

Operating lease right-of-use assets

35,553

37,717

Goodwill and intangible assets, net

1,284,887

1,335,073

Long-term marketable securities

37,188

1,004

Other assets

105,449

78,071

Total assets

2,354,517

2,186,578

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

23,492

18,208

Accrued compensation

84,515

56,696

Accrued other

21,667

20,280

Deferred revenue and customer deposits

330,601

301,753

Current portion of operating lease liabilities

9,874

10,995

Total current liabilities

470,149

407,932

Other long-term liabilities

6,568

8,210

Deferred tax liability

2,225

2,643

Accrued long-term retirement benefits

28,336

27,379

Long-term deferred revenue and customer deposits

168,261

147,510

Operating lease liabilities, net of current portion

29,718

32,509

Total liabilities

705,257

626,183

Stockholders' equity:

Common stock

136

134

Additional paid-in capital

3,325,400

3,255,333

Accumulated other comprehensive income

4,032

4,073

Treasury stock, at cost

(1,731,396

(1,654,702

Retained earnings (Accumulated deficit)

51,088

(44,443

Total stockholders' equity

1,649,260

1,560,395

Total liabilities and stockholders' equity

2,354,517

2,186,578

) )

)

Three Months Ended

Three

Months Ended

Twelve Months Ended

March 31,

December

31,

March 31,

2026

2025

2026

2025

Revenue (GAAP)

203,035

204,987

250,683

859,482

822,679

Gross Profit (GAAP)

159,108

159,290

204,654

682,494

643,944

Share-based compensation expense (1)

2,176

2,090

2,267

9,830

9,806

Amortization of acquired intangible assets (2)

550

993

550

2,202

3,978

Acquisition related depreciation expense (3)

Non-GAAP Gross Profit

161,836

162,374

207,473

694,533

657,734

Income (Loss) from Operations (GAAP)

19,588

19,886

64,315

109,825

(367,602

)

GAAP Operating Margin

9.6

9.7

25.7

12.8

(44.7

Share-based compensation expense (1)

12,599

14,199

13,832

59,948

64,785

Amortization of acquired intangible assets (2)

11,715

12,576

11,706

46,804

50,418

Restructuring charges

605

883

20,500

Goodwill impairment

426,967

Acquisition related depreciation expense (3)

Executive Transition Costs (4)

959

Non-GAAP Income from Operations

43,939

47,277

89,890

218,467

195,115

Non-GAAP Operating Margin

21.6

23.1

35.9

25.4

23.7

Net Income (Loss) (GAAP)

18,240

18,617

55,142

95,531

(366,922

)

Share-based compensation expense (1)

12,599

14,199

13,832

59,948

64,785

Amortization of acquired intangible assets (2)

11,715

12,576

11,706

46,804

50,418

Restructuring charges

605

883

20,500

Goodwill impairment

426,967

Acquisition related depreciation expense (3)

Executive Transition Costs (4)

959

Loss on extinguishment of debt (5)

1,134

Income tax adjustments (6)

(4,116

)

(8,004

)

(6,971

)

(22,135

)

(36,503

)

Non-GAAP Net Income

38,475

38,004

73,746

182,038

160,426

Diluted Net Income (Loss) Per Share (GAAP)

0.25

0.75

1.30

(5.12

)

Share impact of non-GAAP adjustments identified above

0.27

0.25

1.18

7.34

Non-GAAP Diluted Net Income Per Share

0.52

1.00

2.48

2.22

Shares used in computing non-GAAP diluted net income per share

74,171

73,410

73,820

73,355

72,235

Three Months Ended

Three Months

Ended

Twelve Months Ended

March 31,

December 31,

March 31,

2026

2025

2026

2025

(1)

Share-based compensation expense included in these amounts is as follows:

Cost of product revenue

275

283

298

1,283

1,296

Cost of service revenue

1,901

1,807

1,969

8,547

8,510

Research and development

3,843

4,062

4,114

17,479

17,956

Sales and marketing

4,412

4,915

4,749

20,721

22,765

General and administrative

2,168

3,132

2,702

11,918

14,258

Total share-based compensation expense

12,599

14,199

13,832

59,948

64,785

(2)

Amortization expense related to acquired software and product technology, tradenames, customer relationships included in these amounts is as follows:

Cost of product revenue

550

993

550

2,202

3,978

Operating expenses

11,165

11,583

11,156

44,602

46,440

Total amortization expense

11,715

12,576

11,706

46,804

50,418

(3)

Acquisition related depreciation expense included in these amounts is as follows:

Cost of product revenue

Cost of service revenue

Research and development

Sales and marketing

General and administrative

Total acquisition related depreciation expense

(4)

Executive transition costs included in these amounts is as follows:

General and administrative

959

Total executive transition costs

959

(5)

Loss on extinguishment of debt included in this amount is as follows:

Interest and other (income) expense, net

1,134

Total loss on extinguishment of debt

1,134

(6)

Total income tax adjustment included in this amount is as follows:

Tax effect of non-GAAP adjustments above

(4,116

)

(8,004

)

(6,971

)

(22,135

)

(36,503

Total income tax adjustments

(4,116

)

(8,004

)

(6,971

)

(22,135

)

(36,503

)

Three Months Ended

Three Months

Ended

Twelve Months Ended

March 31,

December 31,

March 31,

2026

2025

2026

2025

Net Income (Loss) (GAAP)

18,240

18,617

55,142

95,531

(366,922

)

Net Income (Loss) (GAAP) as a % of revenue

9.0

9.1

22.0

11.1

(44.6

Share-based compensation expense (1)

12,599

14,199

13,832

59,948

64,785

Amortization of acquired intangible assets (2)

11,715

12,576

11,706

46,804

50,418

Restructuring charges

605

883

20,500

Goodwill impairment

426,967

Acquisition related depreciation expense (3)

Loss on extinguishment of debt (5)

1,134

Executive Transition Costs (4)

959

Income Tax Adjustments (6)

(4,116

)

(8,004

)

(6,971

)

(22,135

)

(36,503

)

Net Income Non-GAAP

38,475

38,004

73,746

182,038

160,426

Interest and other (income) expense, net GAAP

(3,758

)

1,685

(2,293

)

(8,683

)

(1,808

)

Loss on extinguishment of debt (5)

(1,134

)

Interest and other (income) expense, net non-GAAP

(3,758

)

1,685

(2,293

)

(8,683

)

(2,942

)

Depreciation excluding acquisition related-depreciation expense

2,496

3,009

1,781

9,681

13,321

Income tax expense non-GAAP

9,222

7,588

18,437

45,112

37,631

Adjusted EBITDA

46,435

50,286

91,671

228,148

208,436

Adjusted EBITDA as a % of revenue

22.9

24.5

36.6

26.5

25.3

Fiscal Year

2026

Fiscal Year

2027

GAAP & Non-GAAP revenue

859.5

$885 million to $915 million

FY'26

FY'27

GAAP net income (loss)

95.5

~$115 million to ~$126 million

Amortization of intangible assets

46.8

~$44 million

Share-based compensation expenses

59.9

~$57 million

Business development & integration expenses

~Less than $1 million

Restructuring charges

0.9

Executive Transition Costs

1.0

Total adjustments

108.6

~$102 million

Related impact of adjustments on income tax

(22.1

)

(~$20 million)

Non-GAAP net income

182.0

~$197 million to ~$208 million

GAAP net income (loss) per share (diluted)

1.30

$1.55 to $1.70

Non-GAAP net income per share (diluted)

2.48

$2.65 to $2.80

Average weighted shares outstanding (diluted GAAP)

73.4

~74 million to ~75 million

Average weighted shares outstanding (diluted Non-GAAP)

73.4

~74 million to ~75 million

**Figures in table may not total due to rounding

Disclaimer

NetScout Systems Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 12:18 UTC.