NetScout Systems (NTCT) Q4 2024 earnings summary

Executive summary

• FY24 revenue fell 9.3% to $829.5M as Cybersecurity growth was offset by constrained Service Assurance demand, especially among domestic service providers. Non-GAAP diluted EPS rose to $2.20 from $2.18.

• FY25 revenue is forecast at $800M–$830M, with Cybersecurity growth expected to be offset by continued Service Assurance headwinds.

Financial highlights

• Q4 FY24 revenue was $203.4M versus $208.1M a year earlier; product revenue was $89.4M versus $91.3M, and service revenue was $114.0M versus $116.8M.

• FY24 product revenue fell to $360.4M from $450.8M, while service revenue increased to $469.0M from $463.7M.

• FY24 non-GAAP net income was $159.1M versus $159.6M; diluted EPS was $2.20 versus $2.18. Q4 non-GAAP net income rose to $39.8M from $27.2M, and EPS to $0.55 from $0.38.

• FY24 GAAP net loss was $147.7M, or $2.07 per diluted share; Q4 GAAP net loss was $32.4M, or $0.46 per diluted share.

Outlook and guidance

• FY25 revenue guidance is $800M–$830M; GAAP diluted EPS is $0.58–$0.82 and non-GAAP diluted EPS is $2.10–$2.30.

• FY25 outlook is flat to slightly down, reflecting Service Assurance headwinds that may offset Cybersecurity momentum.

• Guidance assumes an ~20% tax rate and ~74M weighted-average diluted shares.

• A voluntary separation program is expected to incur $18M–$22M in one-time charges included in GAAP guidance; partial-year net benefits are included in GAAP and non-GAAP expectations.

• Plans include Cybersecurity go-to-market investment and further cost containment.