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Dec 31, 2023
NetScout Q3 2024 Earnings Report
NetScout's revenue was ahead of expectations, benefiting from customer budget spending, while navigating a challenging market environment.
Key Takeaways
NETSCOUT reported third-quarter fiscal year 2024 revenue ahead of expectations, driven by calendar year-end customer budget spending. The cybersecurity business grew year-over-year, while the market environment remained challenging, impacting the service assurance business. The company expects to deliver full fiscal year 2024 revenue at the low-end of its previously disclosed target range.
Total revenue for Q3 FY24 was $218.1 million, compared to $269.5 million in Q3 FY23.
Product revenue for Q3 FY24 was $95.8 million, compared to $149.5 million in Q3 FY23.
Service revenue for Q3 FY24 was $122.2 million, compared to $120.1 million in Q3 FY23.
GAAP net loss for Q3 FY24 was $132.6 million, or ($1.87) per share (diluted), which includes a non-cash goodwill impairment charge. Non-GAAP net income was $52.0 million, or $0.73 per share (diluted).
NetScout
NetScout
NetScout Revenue by Segment
Revenue by Segment
Product Revenue
CapyFin.comService Revenue
CapyFin.com Forward Guidance
NETSCOUT has updated its financial outlook for fiscal year 2024. Revenue is expected to be approximately $840 million. GAAP loss per share is expected to be in the range of ($1.29) to ($1.24). Non-GAAP net income per share (diluted) is expected to be in the range of $2.15 to $2.20.
Positive Outlook
- Revenue (GAAP and non-GAAP) is now expected to be approximately $840 million, at the low end of the previously disclosed range of $840 million to $860 million.
- Non-GAAP net income per share (diluted) is now expected to be in the range of $2.15 to $2.20, at the higher end of the previously disclosed range of $2.00 to $2.20.
- NETSCOUT now expects the effective tax rate for fiscal year 2024 to be closer to the lower end of the outlook range of 20% to 22%.
- NETSCOUT now expects approximately 72 million to 73 million diluted shares outstanding at the end of fiscal year 2024, which includes the benefit of its recent share repurchase program.
- Cybersecurity business grew year-over-year as enterprise and service provider customers continue to prioritize spending in this area.
Challenges Ahead
- GAAP loss per share is now expected to be in the range of ($1.29) to ($1.24), compared to the previous range of $0.69 to $0.89, primarily due to the non-cash goodwill impairment charge in the third quarter of fiscal 2024.
- Market environment remains challenging with constrained customer spending and elongated sales cycles, primarily impacting our service assurance business.
- Goodwill impairment charge of $167.1 million.
- Total revenue for Q3 FY24 was $218.1 million, compared to $269.5 million in Q3 FY23.
- Product revenue for Q3 FY24 was $95.8 million, compared to $149.5 million in Q3 FY23.
Revenue & Expenses
Visualization of income flow from segment revenue to net income