NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT), a leading provider of
performance management, cybersecurity, and DDoS protection
solutions, today announced financial results for its fourth quarter
and full fiscal year ended March 31, 2024.
Remarks by Anil Singhal, NETSCOUT’s President & Chief
Executive Officer:
“Strong Cybersecurity revenue growth continued to be a highlight
for NETSCOUT as customers prioritized cybersecurity spending amid
heightened geopolitical tensions and the expanding cyber threat
landscape. During Q4 and for the full fiscal year 2024, NETSCOUT
achieved solid double digit revenue growth in our Cybersecurity
offering area across both the enterprise and service provider
customer verticals. This strength was more than offset by the
constrained customer spending environment affecting our Service
Assurance offerings, primarily related to our domestic service
provider customers. While our full fiscal year 2024 GAAP operating
performance included non-cash goodwill impairment charges that led
to a net loss per share for the fiscal year, our diligent cost
containment actions and flexible cost structure contributed to
non-GAAP earnings per share growth year over year.
“As we look forward to fiscal year 2025, we are encouraged by
the momentum in our Cybersecurity offerings. Additionally, there is
recognition of lingering headwinds in the domestic service provider
vertical of our Service Assurance offering. This will likely create
a top-line offset resulting in a flat to slightly down revenue
scenario for fiscal year 2025. Considering these dynamics, we have
begun to take further actions that will enhance our focus on
Cybersecurity. We also plan to continue to align our cost structure
with the current demand environment as we seek to execute on our
strategic priorities, preserve earnings for shareholders, and
position NETSCOUT for long-term success.”
Q4 FY24 Financial Results
Total revenue (GAAP and non-GAAP) for the fourth quarter of
fiscal year 2024 was $203.4 million, compared with $208.1 million
(GAAP and non-GAAP) in the fourth quarter of fiscal year 2023. A
reconciliation of all GAAP and non-GAAP results are included in the
financial tables below.
Product revenue (GAAP and non-GAAP) for the fourth quarter of
fiscal year 2024 was $89.4 million, or approximately 44% of total
revenue in the period. This compares with product revenue (GAAP and
non-GAAP) of $91.3 million in the fourth quarter of fiscal year
2023, which was approximately 44% of total revenue in the
period.
Service revenue (GAAP and non-GAAP) for the fourth quarter of
fiscal year 2024 was $114.0 million, or approximately 56% of total
revenue in the period. This compares with service revenue (GAAP and
non-GAAP) of $116.8 million in the fourth quarter of fiscal year
2023, which was approximately 56% of total revenue for the
period.
NETSCOUT’s loss from operations (GAAP) was $37.0 million in the
fourth quarter of fiscal year 2024, which includes a non-cash
goodwill impairment charge of $50.2 million. This compares with
income from operations (GAAP) of $1.6 million in the fourth quarter
of fiscal year 2023. The Company’s operating margin (GAAP) was
negative 18.2% in the fourth quarter of fiscal year 2024, versus
0.8% in the same period of fiscal year 2023. Non-GAAP income from
operations was $39.0 million with a non-GAAP operating margin of
19.2% in the fourth quarter of fiscal year 2024. This compares to
non-GAAP income from operations of $32.7 million and a non-GAAP
operating margin of 15.7% in the fourth quarter of fiscal year
2023. Non-GAAP EBITDA from operations in the fourth quarter of
fiscal year 2024 was $42.9 million, or 21.1% of non-GAAP quarterly
revenue for the period. This compares to non-GAAP EBITDA from
operations of $38.0 million in the fourth quarter of fiscal year
2023, or 18.3% of non-GAAP quarterly revenue for the period.
Net loss (GAAP) for the fourth quarter of fiscal year 2024 was
$32.4 million, or $0.46 per share (diluted), which includes the
non-cash goodwill impairment charge mentioned above, versus a net
loss (GAAP) of $3.2 million, or $0.05 per share (diluted), for the
fourth quarter of fiscal year 2023. On a non-GAAP basis, net income
for the fourth quarter of fiscal year 2024 was $39.8 million, or
$0.55 per share (diluted), compared with $27.2 million, or $0.38
per share (diluted), for the fourth quarter of fiscal year
2023.
As of March 31, 2024, cash, cash equivalents, short and
long-term marketable securities and investments were $424.1
million, compared with $330.1 million as of December 31, 2023, and
$427.9 million as of March 31, 2023. NETSCOUT did not repurchase
any shares of its common stock during the fourth quarter of fiscal
year 2024. The Company’s outstanding debt balance under its
revolving credit facility was $100 million as of March 31, 2024.
The Company’s $800 million revolving credit facility will expire in
July 2026.
Full Year FY24 Financial Results
- Total revenue (GAAP and non-GAAP) for the full fiscal year
2024, was $829.5 million, compared with total revenue (GAAP and
non-GAAP) of $914.5 million in fiscal year 2023. A reconciliation
of all GAAP and non-GAAP results are included in the financial
tables below.
- Product revenue (GAAP and non-GAAP) for fiscal year 2024 was
$360.4 million, compared with $450.8 million in fiscal year
2023.
- Service revenue (GAAP and non-GAAP) for the fiscal year 2024
was $469.0 million, compared with $463.7 million in fiscal year
2023.
- NETSCOUT’s loss from operations (GAAP) for fiscal year 2024 was
$149.8 million, which includes total non-cash goodwill charges of
$217.3 million. This compares with income from operations (GAAP) of
$77.7 million in fiscal year 2023. The Company’s operating margin
(GAAP) for fiscal year 2024 was negative 18.1%, versus 8.5% in
fiscal year 2023. The Company’s non-GAAP income from operations for
the fiscal year 2024 was $187.1 million with a non-GAAP operating
margin of 22.6%, compared with non-GAAP income from operations of
$206.8 million and a non-GAAP operating margin of 22.6% for fiscal
year 2023. The Company’s non-GAAP EBITDA from operations for fiscal
year 2024 was $205.0 million, or 24.7% of non-GAAP total revenue,
compared with non-GAAP EBITDA from operations of $227.8 million, or
24.9% of non-GAAP total revenue for fiscal year 2023.
- For fiscal year 2024, NETSCOUT’s net loss (GAAP) was $147.7
million, or ($2.07) per share (diluted), which includes the
non-cash goodwill impairment charge mentioned above. This compares
with net income (GAAP) of $59.6 million, or $0.82 per share
(diluted), in fiscal year 2023. Non-GAAP net income for the fiscal
year 2024 was $159.1 million, or $2.20 per share (diluted),
compared with non-GAAP net income of $159.6 million, or $2.18 per
share (diluted), for fiscal year 2023.
- During fiscal year 2024, NETSCOUT repurchased approximately 1.8
million shares of its common stock for an aggregate of
approximately $50 million through its share repurchase
program.
Financial Outlook
The Company’s financial outlook for fiscal year 2025 is
anticipated to be as follows:
- Revenue (GAAP and non-GAAP) $800 million to $830 million.
- GAAP net income per share (diluted) in the range of $0.58 to
$0.82. Non-GAAP net income per share (diluted) in the range of
$2.10 to $2.30.
- A reconciliation between GAAP and non-GAAP numbers for
NETSCOUT’s fiscal year 2025 outlook is included in the financial
tables below.
NETSCOUT recently initiated a Voluntary Separation Program (VSP)
as part of restructuring efforts for fiscal year 2025, with
one-time separation charges currently estimated to be in the range
of $18 million to $22 million. These charges are factored into
NETSCOUT's GAAP guidance provided above, while anticipated
partial-year net benefits for fiscal year 2025 are included in both
GAAP and non-GAAP expectations.
Recent Developments and Highlights
- In late April 2024, NETSCOUT announced the findings from its
2nd-half 2023 DDoS Threat Intelligence Report that highlights
increased global “hacktivism”, water torture attacks and
gaming/gambling targeting. The publication indicated that daily
attacks from “hacktivists” increased more than ten-fold between the
first and second halves of 2023 while “hacktivism” and water
torture attacks were key contributors to the more than 7 million
DDoS attacks in the back half of 2023.
- In early April 2024, NETSCOUT released insightful research
findings that revealed widespread UCaaS incidents or outages in
2023 in the enterprise, with 97% of enterprises experiencing at
least one major event and many of these events creating negative
monetary implications. These findings enhance the value proposition
of the nGenius Enterprise platform as NETSCOUT helps its customers
identify and mitigate UCaaS-related issues.
Conference Call
Instructions:
NETSCOUT will host a conference call to discuss its
fourth-quarter and full fiscal year 2024 financial results and
financial outlook today at 8:30 a.m. ET. This call will be webcast
live through NETSCOUT’s website at
https://ir.netscout.com/investors/overview/default.aspx.
Alternatively, investors can listen to the call by dialing (203)
518-9708. The conference call ID is NTCTQ424. A replay of the call
will be available after 12:00 p.m. ET today, for approximately one
week. The number for the replay is (800) 753-5212 for U.S./Canada
and (402) 220-2673 for international callers.
Use of Non-GAAP Financial
Information:
To supplement the financial measures presented in NETSCOUT's
press release 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 income
from operations, non-GAAP operating margin, non-GAAP net income,
non-GAAP diluted net income per share, and non-GAAP earnings before
interest and other expense, income taxes, depreciation, and
amortization (Non-GAAP EBITDA) from operations. Non-GAAP gross
profit removes expenses related to the amortization of acquired
intangible assets, share-based compensation expense, and
acquisition-related depreciation expense. Non-GAAP income from
operations includes the aforementioned adjustments and also removes
gain on the divestiture of a business, legal (benefit) expense
related to civil judgments, restructuring charges and goodwill
impairment charges. 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 change in fair
value of derivative instruments, net of related income tax effects.
Non-GAAP diluted net income per share includes the foregoing
adjustments related to non-GAAP net income. Non-GAAP EBITDA from
operations includes the aforementioned items related to non-GAAP
income from operations and also removes non-acquisition related
depreciation expense. 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
press release.
These non-GAAP measures are not in accordance with GAAP, should
not be considered an alternative for measures prepared in
accordance with GAAP (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.
About NETSCOUT SYSTEMS,
INC.
NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT) protects the connected
world from cyberattacks and performance and availability
disruptions through the company’s unique visibility platform and
solutions powered by its pioneering deep packet inspection at scale
technology. NETSCOUT serves the world’s largest enterprises,
service providers, and public sector organizations. Learn more at
www.netscout.com or follow @NETSCOUT on LinkedIn, Twitter, or
Facebook.
Safe Harbor
Certain information provided in this press release includes
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, 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 press release including,
without limitation, statements regarding NETSCOUT’s financial
results, its financial outlook and expectations, its increased
focus on Cybersecurity, its intention to reduce its cost structure
to align it with the current demand environment, its efforts to
execute on strategic priorities, preserve earnings for
shareholders, and position NETSCOUT for long-term success,
statements regarding charges and benefits resulting from the VSP,
and statements relating to the potential benefit of a market for
the Company’s products and regarding product releases, updates, and
functionality all constitute forward looking statements that
involve risks and uncertainties. Actual results could differ
materially from the forward-looking statements due to known and
unknown risks, uncertainties, assumptions, and other factors. Such
factors include, but are not limited to, 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;
liquidity concerns at, and failures of, banks and other financial
institutions; 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 recent
restructuring actions and other expense management programs; 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. We caution readers not to place undue reliance on any
forward-looking statements included in this press release which
speak only as to the date of this press release. We undertake no
responsibility to update or revise any forward-looking statements,
except as required by law. 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, 2023, filed with the Securities and Exchange Commission.
NETSCOUT assumes no obligation to update any forward-looking
information contained in this press release or with respect to the
announcements described herein.
©2024 NETSCOUT SYSTEMS, INC. All rights reserved. NETSCOUT and
the NETSCOUT logo are registered trademarks or trademarks of
NETSCOUT SYSTEMS, INC. and/or its subsidiaries and/or affiliates in
the USA and/or other countries.
NETSCOUT SYSTEMS, INC.
Condensed Consolidated
Statements of Operations
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Twelve Months Ended
March 31,
March 31,
2024
2023
2024
2023
Revenue:
Product
$
89,406
$
91,274
$
360,444
$
450,793
Service
114,037
116,819
469,011
463,737
Total revenue
203,443
208,093
$
829,455
914,530
Cost of revenue:
Product
16,051
16,901
64,057
94,868
Service
34,289
34,040
123,355
128,230
Total cost of revenue
50,340
50,941
187,412
223,098
Gross profit
153,103
157,152
642,043
691,432
Operating expenses:
Research and development
43,558
46,241
161,213
176,173
Sales and marketing
61,909
67,478
270,979
276,913
General and administrative
21,911
27,926
95,886
103,510
Amortization of acquired intangible
assets
12,547
13,890
50,337
55,390
Restructuring charges
—
(21
)
—
1,782
Goodwill impairment
50,154
—
217,260
—
Gain on divestiture of a business
—
—
(3,806
)
—
Total operating expenses
190,079
155,514
791,869
613,768
Income (loss) from operations
(36,976
)
1,638
(149,826
)
77,664
Interest and other income (expense),
net
4,044
(2,695
)
5,316
(9,249
)
Income (loss) before income tax expense
(benefit)
(32,932
)
(1,057
)
(144,510
)
68,415
Income tax expense (benefit)
(513
)
2,164
3,224
8,767
Net income (loss)
$
(32,419
)
$
(3,221
)
$
(147,734
)
$
59,648
Basic net income (loss) per share
$
(0.46
)
$
(0.05
)
$
(2.07
)
$
0.83
Diluted net income (loss) per share
$
(0.46
)
$
(0.05
)
$
(2.07
)
$
0.82
Weighted average common shares outstanding
used in computing:
Net income (loss) per share - basic
71,164
71,066
71,474
71,781
Net income (loss) per share - diluted
71,164
71,066
71,474
73,046
NETSCOUT SYSTEMS, INC.
Consolidated Balance
Sheets
(In thousands)
(Unaudited)
March 31,
March 31,
2024
2023
Assets
Current assets:
Cash, cash equivalents, marketable
securities and investments
$
423,133
$
418,998
Accounts receivable and unbilled costs,
net
192,096
143,855
Inventories and deferred costs
14,095
17,956
Prepaid expenses and other current
assets
43,170
36,551
Total current assets
672,494
617,360
Fixed assets, net
26,487
34,735
Operating lease right-of-use assets
42,486
51,456
Goodwill and intangible assets, net
1,811,479
2,090,995
Long-term marketable securities
994
8,940
Other assets
41,362
17,074
Total assets
$
2,595,302
$
2,820,560
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
14,506
$
16,473
Accrued compensation
51,362
83,279
Accrued other
15,429
30,674
Deferred revenue and customer deposits
301,806
311,531
Current portion of operating lease
liabilities
11,979
11,650
Total current liabilities
395,082
453,607
Other long-term liabilities
7,055
7,683
Deferred tax liability
4,374
24,939
Accrued long-term retirement benefits
28,413
26,049
Long-term deferred revenue and customer
deposits
130,212
129,814
Operating lease liabilities, net of
current portion
38,101
48,819
Long-term debt
100,000
100,000
Total liabilities
703,237
790,911
Stockholders' equity:
Common stock
131
128
Additional paid-in capital
3,181,366
3,099,698
Accumulated other comprehensive income
3,572
5,738
Treasury stock, at cost
(1,615,483
)
(1,546,128
)
Retained earnings
322,479
470,213
Total stockholders' equity
1,892,065
2,029,649
Total liabilities and stockholders'
equity
$
2,595,302
$
2,820,560
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP
to Current and Historical Non-GAAP Financial Measures
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Three Months Ended
Twelve Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
2024
2023
GAAP and Non-GAAP Revenue
$
203,443
$
208,093
$
218,072
$
829,455
$
914,530
Gross Profit (GAAP)
$
153,103
$
157,152
$
174,448
$
642,043
$
691,432
Share-based compensation expense (1)
2,305
1,940
2,375
10,229
8,415
Amortization of acquired intangible assets
(2)
1,637
2,329
1,636
6,549
9,284
Acquisition related depreciation expense
(3)
1
6
2
12
22
Non-GAAP Gross Profit
$
157,046
$
161,427
$
178,461
$
658,833
$
709,153
Income (Loss) from Operations (GAAP)
$
(36,976
)
$
1,638
$
(134,447
)
$
(149,826
)
$
77,664
GAAP Operating Margin
(18.2
)%
0.8
%
(61.7
)%
(18.1
)%
8.5
%
Share-based compensation expense (1)
16,146
14,761
16,364
70,799
61,986
Amortization of acquired intangible assets
(2)
14,184
16,219
14,169
56,886
64,674
Restructuring charges
—
(21
)
—
—
1,782
Goodwill impairment
50,154
—
167,106
217,260
—
Acquisition related depreciation expense
(3)
11
58
12
119
241
Gain on divestiture of a business
—
—
—
(3,806
)
—
Legal (benefit) expense related to civil
judgments (4)
(4,510
)
50
45
(4,380
)
476
Non-GAAP Income from Operations
$
39,009
$
32,705
$
63,249
$
187,052
$
206,823
Non-GAAP Operating Margin
19.2
%
15.7
%
29.0
%
22.6
%
22.6
%
Net Income (Loss) (GAAP)
$
(32,419
)
$
(3,221
)
$
(132,577
)
$
(147,734
)
$
59,648
Share-based compensation expense (1)
16,146
14,761
16,364
70,799
61,986
Amortization of acquired intangible assets
(2)
14,184
16,219
14,169
56,886
64,674
Restructuring charges
—
(21
)
—
—
1,782
Goodwill impairment
50,154
—
167,106
217,260
—
Acquisition related depreciation expense
(3)
11
58
12
119
241
Gain on divestiture of a business
—
—
—
(3,806
)
—
Legal (benefit) expense related to civil
judgments (4)
(4,510
)
50
45
(4,380
)
476
Change in fair value of derivative
instrument (5)
—
1,380
—
(206
)
1,380
Income tax adjustments (6)
(3,743
)
(2,041
)
(13,085
)
(29,828
)
(30,626
)
Non-GAAP Net Income
$
39,823
$
27,185
$
52,034
$
159,110
$
159,561
Diluted Net Income (Loss) Per Share
(GAAP)
$
(0.46
)
$
(0.05
)
$
(1.87
)
$
(2.07
)
$
0.82
Share impact of non-GAAP adjustments
identified above
1.01
0.43
2.60
4.27
1.36
Non-GAAP Diluted Net Income Per Share
$
0.55
$
0.38
$
0.73
$
2.20
$
2.18
Shares used in computing non-GAAP diluted
net income per share
72,345
72,491
71,638
72,294
73,046
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP
to Current and Historical Non-GAAP Financial Measures -
Continued
(In thousands)
(Unaudited)
Three Months Ended
Three Months Ended
Twelve Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
2024
2023
(1)
Share-based compensation expense included
in these amounts is as follows:
Cost of product revenue
$
303
$
260
$
306
$
1,330
$
1,129
Cost of service revenue
2,002
1,680
2,069
8,899
7,286
Research and development
4,409
3,870
4,498
19,281
17,055
Sales and marketing
5,736
5,374
5,680
25,375
22,612
General and administrative
3,696
3,577
3,811
15,914
13,904
Total share-based compensation expense
$
16,146
$
14,761
$
16,364
$
70,799
$
61,986
(2)
Amortization expense related to acquired
software and product technology, tradenames, customer relationships
included in these amounts is as follows:
Cost of product revenue
$
1,637
$
2,329
$
1,636
$
6,549
$
9,284
Operating expenses
12,547
13,890
12,533
50,337
55,390
Total amortization expense
$
14,184
$
16,219
$
14,169
$
56,886
$
64,674
(3)
Acquisition related depreciation expense
included in these amounts is as follows:
Cost of product revenue
$
1
$
3
$
2
$
8
$
12
Cost of service revenue
—
3
—
4
10
Research and development
8
41
8
82
170
Sales and marketing
2
7
2
18
32
General and administrative
—
4
—
7
17
Total acquisition related depreciation
expense
$
11
$
58
$
12
$
119
$
241
(4)
Legal (benefit) expense related to civil
judgments included in this amount is as follows:
General and administrative
$
(4,510
)
$
50
$
45
$
(4,380
)
$
476
Total legal judgments expense
$
(4,510
)
$
50
$
45
$
(4,380
)
$
476
(5)
Change in fair value of derivative
instrument included in this amount is as follows:
Interest and other (income) expense,
net
$
—
$
1,380
$
—
$
(206
)
$
1,380
Total change in fair value of derivative
instrument
$
—
$
1,380
$
—
$
(206
)
$
1,380
(6)
Total income tax adjustment included in
this amount is as follows:
Tax effect of non-GAAP adjustments
above
$
(3,743
)
$
(2,041
)
$
(13,085
)
$
(29,828
)
$
(30,626
)
Total income tax adjustments
$
(3,743
)
$
(2,041
)
$
(13,085
)
$
(29,828
)
$
(30,626
)
NETSCOUT SYSTEMS, INC.
Reconciliation of Current GAAP
to Current and Historical Non-GAAP Financial Measures -
Non-GAAP EBITDA from
Operations
(In thousands)
(Unaudited)
Three Months Ended
Three Months Ended
Twelve Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
2024
2023
Income (loss) from operations (GAAP)
$
(36,976
)
$
1,638
$
(134,447
)
$
(149,826
)
$
77,664
Previous adjustments to determine non-GAAP
income from operations
75,985
31,067
197,696
336,878
129,159
Non-GAAP Income from operations
$
39,009
$
32,705
$
63,249
$
187,052
$
206,823
Depreciation excluding acquisition
related-depreciation expense
3,863
5,339
4,337
17,981
21,003
Non-GAAP EBITDA from operations
$
42,872
$
38,044
$
67,586
$
205,033
$
227,826
Non-GAAP EBITDA from operations as a % of
revenue
21.1
%
18.3
%
31.0
%
24.7
%
24.9
%
NETSCOUT SYSTEMS, INC.
Reconciliation of GAAP
Financial Outlook to Non-GAAP Financial Outlook
(Unaudited)
(In millions, except net
income per share - diluted)
FY'24
FY'25
GAAP & Non-GAAP revenue
$
829.5
~ $800 million to ~$830
million
FY'24
FY'25
GAAP net income (loss)
$
(147.7
)
~$43 million to ~$61 million
Amortization of intangible assets
$
56.9
~$50 million
Share-based compensation expenses
$
70.8
~$70 million
Business development & integration
expenses*
$
0.1
~Less than $1 million
Gain on divestiture of a business
$
(3.8
)
—
Change in fair value of derivative
instrument
$
(0.2
)
—
Legal (benefit) expense related to civil
judgments
$
(4.4
)
—
Restructuring charges
$
—
~$18 million to ~$22 million
Goodwill impairment
$
217.3
—
Total adjustments
$
336.7
~$140 million to ~$145
million
Related impact of adjustments on income
tax
$
(29.8
)
(~$28 million) to (~$27
million)
Non-GAAP net income
$
159.1
~$155 million to ~$170
million
GAAP net income (loss) per share
(diluted)
$
(2.07
)
~$0.58 to ~$0.82
Non-GAAP net income per share
(diluted)
$
2.20
~$2.10 to ~$2.30
Average weighted shares outstanding
(diluted GAAP)
71.5
~74 million
Average weighted shares outstanding
(diluted Non-GAAP)
72.3
~74 million
*Business development & integration
expenses include acquisition-related depreciation expense
**Figures in table may not total due to
rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509756736/en/
Investors Sean K. F. Hannan Head of Investor Relations
978-614-4374 IR@netscout.com
Media Chris Lucas AVP, Marketing & Corporate Communications
978-614-4124 Chris.Lucas@netscout.com
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