NETSCOUT SYSTEMS INC Q4 FY2025 earnings call

• Anil Singhal noted strong Q4 revenue driven by Cybersecurity, full-year revenue in line with guidance, and non-GAAP EPS growth due to cost management. - Service Assurance faced decline due to Test Optimization divestiture and lower RF modeling revenue but remains well-positioned for 5G and enterprise needs. - Cybersecurity saw ~7% YOY growth in FY2025, driven by enterprise, with need for proactive defense against sophisticated attacks. - Michael Szabados highlighted Q4 customer wins: Service Assurance deal with financial services and Cybersecurity expansion with cloud provider; also mentioned go-to-market activities at events like Mobile World Congress, RSA, etc. - Jean Bua reviewed Q4 and FY2025 financial metrics, backlog, gross margin, operating expenses, EPS, and outlined FY2026 outlook.

For fiscal year 2025, Service Assurance revenue declined approximately 4% year over year, accounting for approximately 65% of total revenue. Cybersecurity revenues grew nearly 7% year over year, accounting for the remaining 35%. In customer verticals, enterprise customer vertical revenue grew 7.5% YOY while service provider customer vertical revenue decreased 10.1%, with enterprise accounting for ~57% of total revenue and service provider ~43%. Geographically, 57% of revenue was from the US and 43% from international markets in FY2025.

• FY2026 revenue expected in range of ~$825M to $865M. - Non-GAAP diluted EPS expected within $2.25 to $2.40. - Full year effective tax rate expected ~20%. - Q1 FY2026 revenue anticipated to grow 3%-5% YOY, with EPS growth at similar rate.

• Macro-economic uncertainty influencing customer behavior and sales cycles. - Tariff-related uncertainty in the global macroeconomic landscape. - Uncertainty regarding government and defense business sales cycles.

Q: Mike Richards asked about customer sentiment on tariffs and if guidance accounts for uncertainty; A: Anil Singhal said there are delayed sales cycles, and guidance range covers uncertainties but it's wait and see with customers on order timing.

Q: Kevin Liu inquired about tariffs pulling forward purchases, software vs traditional solutions, and government/defense impact; A: Jean Bua said no pull forward from tariffs, Anil Singhal noted focus on software solutions, and Anil mentioned uncertainty in government/defense sales cycles as a question mark but no current effect.