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Dec 31, 2024
NetScout Q3 2025 Earnings Report
NetScout's Q3 fiscal year 2025 revenue and earnings results exceeded expectations with strong performance across Cybersecurity and Service Assurance product lines.
Key Takeaways
NETSCOUT's Q3 fiscal year 2025 saw revenue of $252.0 million, exceeding expectations with strong performance in both Cybersecurity and Service Assurance. GAAP net income was $48.8 million, or $0.67 per share (diluted), while non-GAAP net income was $68.3 million, or $0.94 per share (diluted). The company is narrowing its fiscal year 2025 outlook ranges while maintaining the midpoints from previous guidance for revenue and non-GAAP net income per share.
Total revenue for Q3 fiscal year 2025 was $252.0 million, compared to $218.1 million in Q3 fiscal year 2024.
Product revenue was $128.2 million, approximately 51% of total revenue.
Service revenue was $123.8 million, approximately 49% of total revenue.
GAAP net income was $48.8 million, or $0.67 per share (diluted), while non-GAAP net income was $68.3 million, or $0.94 per share (diluted).
NetScout
NetScout
NetScout Revenue by Segment
Revenue by Segment
Product Revenue
CapyFin.comService Revenue
CapyFin.com Forward Guidance
NETSCOUT is narrowing the ranges for its fiscal year 2025 outlook while maintaining the midpoints from previous guidance for revenue and non-GAAP net income per share.
Positive Outlook
- Revenue (GAAP and non-GAAP) is now expected to be in the range of $810 million to $820 million compared to the previous range of $800 million to $830 million, which maintains the mid-point.
- Non-GAAP net income per share (diluted) is now expected to be in the range of $2.15 to $2.25 compared to the previous range of $2.10 to $2.30, which maintains the mid-point.
- The Company expects that these combined actions will generate net annual run-rate savings of approximately $25 million.
- Approximately $19 million of the annual run-rate savings are expected to be realized in fiscal year 2025, including $6 million in the fourth quarter of fiscal year 2025.
- NETSCOUT initiated a Voluntary Separation Program (VSP) as part of its restructuring efforts for fiscal year 2025.
Challenges Ahead
- GAAP net loss per share (diluted) is now expected to be in the range of ($5.21) to ($5.10), primarily attributable to goodwill impairment and restructuring charges taken in the first nine months of fiscal year 2025, as well as restructuring charges anticipated for the fourth quarter of fiscal year 2025. This compares to the previous GAAP net loss per share range of ($5.22) to ($5.01).
- The VSP is expected to result in a net reduction of approximately 142 employees, which represents approximately 6.2% of its workforce as of March 31, 2024.
- The Company recorded restructuring charges totaling $0.6 million and $19.6 million, respectively.
- These agreements provide termination benefits totaling approximately $2.0 million to certain employees who continue to render services to the Company.
- The Company estimates restructuring charges related to the transition agreements for fiscal year 2025 will amount to approximately $1 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income