Slides
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 1 Q2 FY’26 Financial Results Conference Call PERIOD ENDED September 30, 2025 Published November 6, 2025
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 2 Agenda 01 02 03 04 Introduction Scott Dressel, Assistant Vice President Corporate Finance CEO Perspective Anil Singhal, President & Chief Executive Officer (CEO) CFO Financial Review Tony Piazza, Executive Vice President & Chief Financial Officer (CFO) Question & Answer Session
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 3 Forward-Looking Statements Forward Looking Statements: This presentation 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 presentation include, without limitation, statements regarding NETSCOUT’s ability to capture new opportunities through its differentiated solutions; 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; 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 Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on May 15, 2025. Any forward-looking information in this presentation is as of the date of this presentation, and NETSCOUT undertakes no obligation to update such information unless required by law. NETSCOUT’s financial guidance is based on estimates and assumptions that are subject to significant uncertainties.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 4 Non-GAAP Financial Metrics To supplement the financial measures presented in NETSCOUT’s presentation 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 gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted net income per share, non-GAAP earnings before interest and other expense, income taxes, depreciation, and amortization from operations (Non-GAAP EBITDA from operations), and non-GAAP free cash flow. Non-GAAP gross profit and non-GAAP gross margin remove expenses related to , share-based compensation expense, the amortization of acquired intangible assets, and acquisition-related depreciation expense. Non-GAAP income from operations includes the aforementioned adjustments related to non- GAAP gross profit and also removes restructuring charges, goodwill impairment charges, and executive transition costs. Non-GAAP operating margin includes the foregoing adjustments related to non-GAAP income from operations. 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. Non-GAAP diluted net income per share, which may also be referred to as non-GAAP Earnings per Share (EPS), includes the foregoing adjustments related to non-GAAP net income. Non-GAAP EBITDA from operations includes the aforementioned adjustments related to non-GAAP income from operations and also removes non-acquisition related depreciation expense. Free cash flow removes cash outlays for fixed and intangible assets from operating cash flow. 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 presentation. These non-GAAP measures are not prepared in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (revenue, gross profit, 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.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 5 CEO Perspective Anil Singhal, President & Chief Executive Officer
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 6 Q2 FY’26 & 1H FY’26 Financial Highlights (GAAP revenue, other metrics non-GAAP) Total Revenue (GAAP) Operating Margin EPSGross Margin 1H $405.8M +11% Y/Y 1H 80.2% +1.8pts Y/Y 1H 20.9% +5.0pts Y/Y 1H $0.95 +27% Y/Y Q2 $219.0M +15% Y/Y Q2 81.4% +1.7pts Y/Y Q2 26.5% +3.4pts Y/Y Q2 $0.62 +32% Y/Y Note: Revenue is a GAAP measure. All other amounts are non-GAAP measures. See the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP finance measures and to the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 7 Business & Market Insights Service Assurance Cybersecurity Product Line Performance Market Insights Customer Wins
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 8 FY’26 Outlook & Summary Remain focused on our strategic priorities: Product innovation Annual revenue growth Margin enhancement Raising FY26 revenue and EPS outlook Motivated by positive customer feedback and their reliance on our highly curated data to drive improved business outcomes Continue to monitor uncertain macro environment as we navigate second half of fiscal year
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 9 CFO Financial Review Q2 FY’26 Results Tony Piazza, Executive Vice President & Chief Financial Officer
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 10 $M (except EPS & % data) Q2 FY'25 Q2 FY'26 Y/Y Change 1H FY'25 1H FY'26 Y/Y Change Revenue $191.1 $219.0 14.6% $365.7 $405.8 11.0% Product Revenue $81.0 $94.7 16.9% $142.2 $167.7 17.9% Service Revenue $110.1 $124.3 12.9% $223.5 $238.1 6.5% Gross Profit Margin 79.7% 81.4% 78.4% 80.2% Operating Margin 23.1% 26.5% 15.9% 20.9% Net Income $33.6 $45.1 34.3% $54.1 $69.8 29.0% Diluted Net Income per Share $0.47 $0.62 31.9% $0.75 $0.95 26.7% Diluted Shares Outstanding 71.8 72.9 72.2 73.1 Q2 FY’26 & 1H FY’26 Results Note: Revenue is a GAAP measure. All other amounts are non-GAAP measures. See the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP finance measures and to the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures. Figures in charts and tables may not total due to rounding. (GAAP revenue, other metrics non-GAAP)
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 11 $238.4 65% $262.4 65% $127.3 35% $143.4 35% $365.7 $405.8 1H FY'25 1H FY'26 Revenue by Product Line Service Assurance Cybersecurity $148.1 40% $160.5 40% $217.6 60% $245.3 60% $365.7 $405.8 1H FY'25 1H FY'26 Revenue by Customer Vertical Service Provider Enterprise 1H FY’26 Revenue Trends: Product Lines & Customer Verticals SA +10.1% Cyber +12.7% Total +11.0% ENT +12.7% SP +8.4% Total +11.0% Note: In $M except % data. Revenue is a GAAP measure. Figures in charts and tables may not total due to rounding.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 12 $M 1H FY'25 1H FY'26 Y/Y Change Revenue $365.7 $405.8 11.0% United States $211.2 $231.7 9.7% International $154.5 $174.1 12.7% Europe $63.5 $64.3 1.3% Asia $28.9 $30.3 4.9% Rest of World $62.1 $79.4 27.9% 58% 17% 8% 17%42% 1H FY'25 57% 16% 7% 20%43% 1H FY'26 1H FY’26 Revenue Trends: Geographic Mix Note: In $M except % data. Revenue is a GAAP measure. Figures in charts and tables may not total due to rounding.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 13 Balance Sheet & Free Cash Flow Review Note: See the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP financial measures and to the appendix for information regarding the Financial Profile and Free Cash Flow calculations and for the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures Q2 FY'26 Total Liquidity 1,126.9$ Liquidity to EBITDA 4.6x Gross Leverage 0.0x Net Leverage (2.2x) Credit Facility Net Leverage (1.3x) Financial Profile (Non-GAAP) $M Q1 FY'26 Q2 FY'26 Operating Cash Flow 73.6$ 6.6$ Purchase of Fixed & Intangible Assets (1.9)$ (2.2)$ Non-GAAP Free Cash Flow 71.7$ 4.3$ $M (GAAP, Unaudited) Q2 FY'26 Cash and Securities 526.9$ Accounts Receivable, Net 130.2$ Inventories 12.4$ Total Long-Term Debt -$ Total Deferred Revenue 428.1$ Total Stockholders' Equity 1,573.6$
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 14 FY’26 Outlook Other FY’26 Outlook Assumptions • Anticipate annual tax rate of approx. 20% • Anticipate approximately 73 million weighted average diluted shares outstanding See the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP finance measures and the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures. FY'25 FY'26 Outlook Revenue $822.7 $830 - $870 GAAP EPS ($5.12)* $1.13 - $1.23* Adjustments $7.34 $1.22 Non-GAAP EPS $2.22 $2.35 - $2.45 * GAAP EPS includes goodwill impairment charges in FY'25 and restructuring charges in both FY'25 and FY'26 $M EPS (Diluted) FY'25 FY'26 Outlook
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 15 RBC 2025 Global TIMT Conference Date: November 19th, 2025 Location: NYC 6th Annual Needham Tech Conference Date: November 20th, 2025 Location: NYC UBS Global Technology & AI Conference Date: December 3rd, 2025 Location: Scottsdale, AZ Upcoming Investor Event
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 16 Appendix
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 17 $M (except EPS & % data) Q2 FY'25 Q2 FY'26 1H FY'25 1H FY'26 Revenue: 191.1$ 219.0$ 14.6% 365.7$ 405.8$ 11.0% Product Revenue 81.0$ 94.7$ 16.9% 142.2$ 167.7$ 17.9% Service Revenue 110.1$ 124.3$ 12.9% 223.5$ 238.1$ 6.5% Cost of Revenue 42.1$ 43.6$ 3.7% 86.4$ 87.0$ 0.7% Gross Profit 149.1$ 175.4$ 17.7% 279.2$ 318.7$ 14.1% Gross Profit Margin 78.0% 80.1% 76.4% 78.6% Operating Expenses 134.9$ 142.9$ 5.9% 728.4$ 292.8$ (59.8%) Income (loss) from Operations 14.1$ 32.5$ 130.0% (449.2)$ 25.9$ 105.8% Income (loss) from Operations Margin 7.4% 14.8% (122.8%) 6.4% Net Income (loss) 9.0$ 25.8$ 186.1% (434.3)$ 22.1$ 105.1% Diluted Net Income (loss) per Share 0.13$ 0.35$ 169.2% (6.08)$ 0.30$ 104.9% Diluted Shares Outstanding 71.8 72.9 71.5 73.1 Y/Y Change Y/Y Change Q2 FY’26 & 1H FY’26 Results GAAP * Figures in charts and tables may not total due to rounding.
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 18 $M (except EPS & % data) Q2 FY'25 Q2 FY'26 1H FY'25 1H FY'26 Revenue: 191.1$ 219.0$ 14.6% 365.7$ 405.8$ 11.0% Product Revenue 81.0$ 94.7$ 16.9% 142.2$ 167.7$ 17.9% Service Revenue 110.1$ 124.3$ 12.9% 223.5$ 238.1$ 6.5% Cost of Revenue 38.9$ 40.8$ 5.1% 78.9$ 80.5$ 2.1% Gross Profit 152.2$ 178.2$ 17.0% 286.8$ 325.2$ 13.4% Gross Profit Margin 79.7% 81.4% 78.4% 80.2% Operating Expenses 108.2$ 120.1$ 11.0% 228.7$ 240.6$ 5.2% Income from Operations 44.1$ 58.1$ 31.8% 58.1$ 84.6$ 45.7% Income from Operations Margin 23.1% 26.5% 15.9% 20.9% Net Income 33.6$ 45.1$ 34.3% 54.1$ 69.8$ 29.0% Diluted Net Income per Share 0.47$ 0.62$ 31.9% 0.75$ 0.95$ 26.7% Diluted Shares Outstanding 71.8 72.9 72.2 73.1 Y/Y Change Y/Y Change Q2 FY’26 & 1H FY’26 Results Note: Revenue is a GAAP measure. All other amounts are non-GAAP measures. See the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP finance measures and the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures. Figures in charts and tables may not total due to rounding. (GAAP revenue, other metrics non-GAAP)
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 19 Q2 FY’26 GAAP to Non-GAAP Reconciliation Q1 Ending 6/30 $Thousands (except EPS) 2025 2024 2025 2025 2024 GAAP Revenue 219,017$ 191,108$ 186,747$ 405,764$ 365,673$ Gross Profit (GAAP) 175,407$ 149,051$ 143,325$ 318,732$ 279,247$ Share-based compensation expense (1) 2,227 2,200 3,160 5,387 5,520 Amortization of acquired intangible assets (2) 551 996 550 1,101 1,991 Acquisition related depreciation expense (3) 1 2 2 3 4 Non-GAAP Gross Profit 178,186 152,249 147,037 325,223$ 286,762$ Income (Loss) from Operations (GAAP) 32,486$ 14,123$ (6,564)$ 25,922$ (449,201)$ GAAP Operating Margin 14.8% 7.4% -3.5% 6.4% -122.8% Share-based compensation expense (1) 13,557 14,886 19,959 33,516 36,084 Amortization of acquired intangible assets (2) 11,713 12,638 11,669 23,382 25,247 Restructuring charges 304 2,409 529 833 18,972 Goodwill impairment — — — — 426,967 Acquisition related depreciation expense (3) 11 11 12 23 23 Executive Transition Costs (4) — — 959 959 — Non-GAAP Income from Operations 58,071$ 44,067$ 26,564$ 84,635$ 58,092$ Non-GAAP Operating Margin 26.5% 23.1% 14.2% 20.9% 15.9% Net Income (Loss) (GAAP) 25,828$ 9,027$ (3,679)$ 22,149$ (434,349)$ Share-based compensation expense (1) 13,557 14,886 19,959 33,516 36,084 Amortization of acquired intangible assets (2) 11,713 12,638 11,669 23,382 25,247 Restructuring charges 304 2,409 529 833 18,972 Goodwill impairment — — — — 426,967 Acquisition related depreciation expense (3) 11 11 12 23 23 Executive Transition Costs (4) — — 959 959 — Income tax adjustments (5) (6,336) (5,409) (4,712) (11,048) (18,804) Non-GAAP Net Income 45,077$ 33,562$ 24,737$ 69,814$ 54,140$ Diluted Net Income (Loss) Per Share (GAAP) 0.35$ 0.13$ (0.05)$ 0.30$ (6.08)$ Share impact of non-GAAP adjustments identified above 0.27 0.34 0.39 0.65 6.83 Non-GAAP Diluted Net Income Per Share 0.62$ 0.47$ 0.34$ 0.95$ 0.75$ Shares used in computing non-GAAP diluted net income per share 72,917 71,837 73,376 73,130 72,197 1H Ending 9/30 Q2 Ending 9/30
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 20 Q2 FY’26 GAAP to Non-GAAP Reconciliation Q1 Ending 6/30 $Thousands (except EPS) 2025 2024 2025 2025 2024 (1) Share-based compensation expense included in these amounts is as follows: Cost of product revenue 297$ 295$ 413$ 710$ 726$ Cost of service revenue 1,930 1,905 2,747 4,677 4,794 Research and development 3,990 3,934 5,532 9,522 9,820 Sales and marketing 4,672 5,275 6,889 11,562 12,779 General and administrative 2,668 3,477 4,378 7,045 7,965 Total share-based compensation expense 13,557$ 14,886$ 19,959$ 33,516$ 36,084$ (2) Amortization expense related to acquired software and product technology, tradenames, customer relationships included in these amounts are as follows: Cost of product revenue 551$ 996$ 550$ 1,101$ 1,991$ Operating expenses 11,162 11,642 11,119 22,281 23,256 Total amortization expense 11,713$ 12,638$ 11,669$ 23,382$ 25,247$ (3) Acquisition related depreciation expense included in these amounts is as follows: Cost of product revenue 1$ 2$ 2$ 3$ 4$ Cost of service revenue — — — — — Research and development 7 7 8 15 15 Sales and marketing 2 2 2 4 4 General and administrative 1 — — 1 — Total acquisition related depreciation expense 11$ 11$ 12$ 23$ 23$ (4) Executive transition costs included in these amounts is as follows: General and administrative — $— 959 959$ 0 Total executive transition costs 959$ 959 —$ (5) Total income tax adjustment included in this amount is as follows: Tax effect of non-GAAP adjustments above (6,336)$ (5,409)$ (4,712)$ (11,048)$ (18,804)$ Total income tax adjustments (6,336)$ (5,409)$ (4,712)$ (11,048)$ (18,804)$ Q2 1H Ending 9/30 Ending 9/30
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 21 FY’26 Outlook: GAAP to Non-GAAP Reconciliation Net income per share (diluted) equates to earnings per share (EPS) described elsewhere in this presentation. Note: please see the slide entitled “Non-GAAP Financial Metrics” near the beginning of this presentation for a description of the non-GAAP measures. Figures may not foot due to rounding. $M (except EPS) FY'25 FY'26 GAAP revenue 822.7$ ~ $830 to ~$870 FY'25 FY'26 GAAP net income (loss) (366.9)$ ~$83 to ~$90 Amortization of intangible assets 50.4$ ~$47 Share-based compensation expenses 64.8$ ~$62 Acquisition related depreciation expense -$ - Executive Transition Costs -$ ~$1 Loss on debt extinguishment 1.1$ - Restructuring charges 20.5$ ~$1 Goodwill impairment 427.0$ - Total adjustments 563.8$ ~$111 Related impact of adjustments on income tax (36.5)$ (~$23) Non-GAAP net income 160.4$ ~$171 to ~$178 GAAP net income (loss) per share (diluted) (5.12)$ ~$1.13 to ~$1.23 Non-GAAP net income per share (diluted) 2.22$ ~$2.35 to ~$2.45 Average weighted shares outstanding (diluted GAAP) 71.6 ~73 Average weighted shares outstanding (diluted Non-GAAP) 72.2 ~73
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COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 22 Financial Measures & Additional Information • Cash and securities defined as cash, cash equivalents, short- and long-term marketable securities, and investments • Liquidity calculated as available credit under the Company’s senior secured credit facility plus cash and securities divided by the 12-month trailing adjusted non-GAAP EBITDA (as defined within the Company’s senior secured credit facility). • Gross Leverage is calculated as total debt plus contingent debt divided by the 12 -month trailing adjusted non-GAAP EBITDA. • Net leverage is calculated as total debt plus contingent debt minus cash and securities, divided by the 12 -month trailing adjusted non-GAAP EBITDA • As defined in the Company’s senior secured credit facility, Credit Facility Net Leverage is calculated as total debt plus con tingent debt minus the lesser of unrestricted cash and 125% of 12-month trailing adjusted non-GAAP EBITDA divided by the 12-month trailing adjusted non-GAAP EBITDA • The Company’s non-GAAP EBITDA from Operations as calculated in its press release may differ from the non-GAAP EBITDA as defined within the Company’s senior secured credit facility $M Non-GAAP Free Cash Flow Reconciliation to GAAP Q1 FY'26 Q2 FY'26 Operating Cash Flow 73.6$ 6.6$ Purchase of Fixed & Intangible Assets (1.9)$ (2.2)$ Non-GAAP Free Cash Flow 71.7$ 4.3$ Q1 FY'26 Q2 FY'26 Operating Cash Flow 73.6$ 6.6$ Cash from Investing Activities (17.3)$ 4.7$ Cash from from Financing Activities (28.8)$ (18.0)$ Effects of Exchange Rate Changes on Cash and Cash Equivalents 4.7$ 0.4$ Net Change in Cash and Cash Equivalents 32.2$ (6.3)$
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