NetScout Systems (NTCT) Q2 2027 earnings summary

Executive summary

• Q2 revenue rose 1.4% to $222.2M; H1 revenue increased 6.6% to $432.6M, with stronger non-GAAP profitability.

• Q2 results were in line with expectations; H1 performance supported reaffirmed FY27 guidance, while cost discipline expanded operating margins.

• AI, Network Observability, AIOps, Cybersecurity and DDoS Attack Protection were cited as long-term growth opportunities.

Financial highlights

• Q2 product revenue fell 5.1% to $89.9M; service revenue grew 6.4% to $132.3M.

• Q2 non-GAAP net income was $52.8M and diluted EPS was $0.71, versus $45.1M and $0.62 YoY; GAAP net income was $34.4M and diluted EPS was $0.47.

• H1 non-GAAP net income was $91.3M and diluted EPS was $1.23, versus $69.8M and $0.95; GAAP net income was $56.2M versus $22.1M.

• Q2 non-GAAP gross margin was 80.9%, down 0.5 points YoY; operating expenses fell 2.7% to $116.9M, and operating margin rose to 28.3% from 26.5%.

• H1 non-GAAP gross margin was 80.8%, up 0.6 points; operating margin was 24.6%, up 3.7 points.

Outlook and guidance

• FY27 outlook reaffirmed: revenue of $885M–$915M, GAAP diluted EPS of $1.55–$1.70 and non-GAAP diluted EPS of $2.65–$2.80.

• FY27 assumptions include a non-GAAP tax rate of ~20% and 74M–75M weighted-average diluted shares.

• Q3 revenue guidance is $240M–$250M; excluding $15M of prior-year pulled-forward revenue, implied growth is low- to mid-single-digit.

• Q3 non-GAAP diluted EPS guidance is $0.90–$0.95; ENGAGE Summit costs shift into Q3 from Q2 YoY.