# NETSCOUT SYSTEMS INC (NTCT)

Informational only - not investment advice.

CIK: 0001078075
SIC: 7373 Services-Computer Integrated Systems Design
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7373 Services-Computer Integrated Systems Design](/industry/7373/)
Latest 10-K filed: 2026-05-14
SEC page: https://www.sec.gov/edgar/browse/?CIK=1078075
Filing source: https://www.sec.gov/Archives/edgar/data/1078075/000107807526000050/ntct-20260331.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 859482000 | USD | 2026 | 2026-05-14 |
| Net income | 95531000 | USD | 2026 | 2026-05-14 |
| Assets | 2354517000 | USD | 2026 | 2026-05-14 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001078075.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  | 909,918,000 | 891,820,000 | 831,282,000 | 855,575,000 | 914,530,000 | 829,455,000 | 822,679,000 | 859,482,000 |
| Net income | 33,291,000 | 79,812,000 | -73,324,000 | -2,754,000 | 19,352,000 | 35,874,000 | 59,648,000 | -147,734,000 | -366,922,000 | 95,531,000 |
| Operating income | 62,064,000 | -4,058,000 | -71,580,000 | 17,638,000 | 37,130,000 | 48,634,000 | 77,664,000 | -149,826,000 | -367,602,000 | 109,825,000 |
| Gross profit | 815,973,000 | 714,882,000 | 655,791,000 | 649,628,000 | 609,185,000 | 641,389,000 | 691,432,000 | 642,043,000 | 643,944,000 | 682,494,000 |
| Diluted EPS | 0.36 | 0.90 | -0.93 | -0.04 | 0.26 | 0.48 | 0.82 | -2.07 | -5.12 | 1.30 |
| Assets | 3,601,513,000 | 3,368,608,000 | 3,269,994,000 | 3,120,503,000 | 3,085,038,000 | 3,194,709,000 | 2,820,560,000 | 2,595,302,000 | 2,186,578,000 | 2,354,517,000 |
| Liabilities | 1,165,263,000 | 1,299,826,000 | 1,204,561,000 | 1,182,584,000 | 1,079,259,000 | 1,134,314,000 | 790,911,000 | 703,237,000 | 626,183,000 | 705,257,000 |
| Stockholders' equity | 2,436,250,000 | 2,068,782,000 | 2,065,433,000 | 1,937,919,000 | 2,005,779,000 | 2,060,395,000 | 2,029,649,000 | 1,892,065,000 | 1,560,395,000 | 1,649,260,000 |
| Cash and cash equivalents | 304,880,000 | 369,821,000 | 409,632,000 | 338,489,000 | 467,176,000 | 636,161,000 | 386,794,000 | 389,674,000 | 457,415,000 | 586,499,000 |
| Net margin |  |  | -8.06% | -0.31% | 2.33% | 4.19% | 6.52% | -17.81% | -44.60% | 11.11% |
| Operating margin |  |  | -7.87% | 1.98% | 4.47% | 5.68% | 8.49% | -18.06% | -44.68% | 12.78% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001078075.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2023-Q1 | 2022-06-30 |  |  | -0.10 | reported discrete quarter |
| 2023-Q2 | 2022-09-30 |  |  | 0.24 | reported discrete quarter |
| 2023-Q3 | 2022-12-31 |  |  | 0.72 | reported discrete quarter |
| 2024-Q1 | 2023-06-30 | 211,138,000 | -4,200,000 | -0.06 | reported discrete quarter |
| 2024-Q2 | 2023-09-30 | 196,802,000 | 21,462,000 | 0.29 | reported discrete quarter |
| 2024-Q3 | 2023-12-31 | 218,072,000 | -132,577,000 | -1.87 | reported discrete quarter |
| 2024-Q4 | 2024-03-31 | 203,443,000 | -32,419,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-06-30 | 174,565,000 | -443,376,000 | -6.20 | reported discrete quarter |
| 2025-Q2 | 2024-09-30 | 191,108,000 | 9,027,000 | 0.13 | reported discrete quarter |
| 2025-Q3 | 2024-12-31 | 252,019,000 | 48,810,000 | 0.67 | reported discrete quarter |
| 2025-Q4 | 2025-03-31 | 204,987,000 | 18,617,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2025-06-30 | 186,747,000 | -3,679,000 | -0.05 | reported discrete quarter |
| 2026-Q2 | 2025-09-30 | 219,017,000 | 25,828,000 | 0.35 | reported discrete quarter |
| 2026-Q3 | 2025-12-31 | 250,683,000 | 55,142,000 | 0.75 | reported discrete quarter |
| 2026-Q4 | 2026-03-31 | 203,035,000 | 18,240,000 |  | derived Q4 = FY annual - nine-month YTD |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1078075/000107807526000012/ntct-20251231.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-02-05
Report date: 2025-12-31

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (SEC) on May 15, 2025 (Annual Report). This discussion contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in Part I, Item 1A "Risk Factors" in our Annual Report and Part II, Item 1A of our Quarterly Report on From 10-Q for the fiscal quarter ended September 30, 2025, filed with the SEC on November 6, 2025. These risks and uncertainties could cause actual results to differ significantly from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the section titled "Cautionary Statement Concerning Forward-Looking Statements" that appears at the beginning of this Quarterly Report. These statements, like all statements in this report, speak only as of the date of this Quarterly Report (unless another date is indicated), and, except as required by law, we undertake no obligation to update or revise these statements in light of future developments.

Overview

We are an industry leader with over four decades of experience in providing enterprise network observability, carrier service assurance, cybersecurity, and Distributed-Denial-Of-Service, or DDoS, protection solutions. Our unique visibility platform and solutions are powered by our pioneering deep packet inspection technology at scale, which is used by many Fortune 500 companies to protect their digital business services against disruption. Service providers and enterprises, including local, state and federal government agencies, rely on our solutions to achieve the visibility and protection necessary to optimize network performance, ensure the delivery of high-quality, mission-critical applications and services, gain timely insight into the end user experience and to protect their networks from attack. With our offerings, customers can quickly, efficiently and effectively identify and resolve issues that result in downtime, interruptions to services, poor service quality or compromised data, thereby reducing meantime-to-resolution of issues and driving compelling returns on their investments in their networks and broader technology initiatives. Some of the more significant technology trends and catalysts for our business include the evolution of customers' digital transformation initiatives such as the migration to cloud environments and the edges of their networks, the rapidly evolving cybersecurity threat landscape, artificial intelligence and business analytics advancements that can help enhance observability, and the 5G technology evolution in both the service provider and enterprise customer verticals.

Our operating results are influenced by a number of factors, including, but not limited to, the volume, mix, and quantity of products and services sold, pricing, costs and availability of materials used in our products, growth in employee-related costs, including commissions, and the expansion of our operations. Factors that affect our ability to maximize our operating results include, but are not limited to, our ability to introduce and enhance existing products, the marketplace acceptance of those new or enhanced products, continued expansion into international markets, expansion into new or adjacent markets, development of strategic partnerships, competition, successful acquisition and integration efforts, and our ability to control costs, and make improvements in a highly competitive industry.

Global and Macroeconomic Conditions

We continue to closely monitor current global and macroeconomic conditions, including the impacts of the ongoing war in Ukraine and hostilities in the Middle East, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, international trade relations (including trade protection measures, such as tariffs and other trade barriers), and the risk of a recession, including the manner and extent to which they have impacted and could continue to impact our business, customers, employees, supply chain, and distribution network. In addition, our industry is experiencing AI-related supply-chain dynamics which could influence the timing and size of certain customer orders. The full extent of the impacts of these global and macroeconomic conditions remain dynamic. In response to the war in Ukraine, we ceased business operations in Russia, including sales, support on existing contracts and professional services. We remain optimistic but cognizant of ongoing macroeconomic dynamics and constrained customer spending in the service provider market and firmly focused on driving product innovation, returning to annual revenue growth, and enhancing margins through continued disciplined cost management as we navigate the current macroeconomic landscape that may persist through fiscal year 2026. As a result, we have continued our efforts to manage discretionary costs and align spending with the current environment while we continue to execute on our long-term strategic plans.

Though we continue to monitor the impacts of evolving global and macroeconomic conditions on our business, we believe our current cash reserves and access to capital through our revolving credit facility leave us well-positioned to manage our business in today's environment. We expect net cash provided by operations combined with cash, cash equivalents, marketable securities and investments and borrowing availability under our revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. We continue to take actions to manage costs and increase productivity throughout our company, including managing discretionary spending and hiring activities, but are continuing to invest in areas that advance our business

25

for the future. In addition to our cash equivalents, the Company had $600 million available under a revolving credit facility based on covenant levels at December 31, 2025.

Results Overview

Total revenue increased $38.8 million, or 6%, for the nine months ended December 31, 2025, as compared to total revenue for the nine months ended December 31, 2024. The increase was attributable to an increase in both product and service revenue from both our service assurance and cybersecurity offerings. Within these offerings, both our enterprise and service provider customer verticals contributed to this growth.

Our gross profit percentage increased 2 percentage points to 80% during the nine months ended December 31, 2025, as compared with the nine months ended December 31, 2024, primarily due to increased product revenue growth and a more favorable product mix associated with increased licensing of our software products.

Net income for the nine months ended December 31, 2025 was $77.3 million, as compared with a net loss for the nine months ended December 31, 2024 of $385.5 million. The decrease of $462.8 million in net loss was primarily due to a $427.0 million decrease in goodwill impairment charges, a $38.8 million increase in revenue, $19.0 million decrease from restructuring charges, $5.1 million decrease in interest expense, a $3.0 million decrease in direct material costs, and a $1.8 million increase in interest income. These decreases to net loss were partially offset by a $16.3 million increase in income tax expense, a $10.8 million increase to employee-related expenses primarily due to an increase in variable incentive compensation, and a $5.5 million decrease in other income primarily due to the change in fair value of the equity investment in Napatech that was sold in August 2025.

At December 31, 2025, we had cash, cash equivalents, marketable securities and investments (current and non-current) of $586.2 million. This represents an increase of $93.7 million from $492.5 million at March 31, 2025. This increase was primarily due to $142.3 million of net cash provided by operations, $11.8 million in proceeds from the sale of our entire Napatech equity investment and a $47.1 million in proceeds from the maturity of marketable securities. Partially offsetting the increase was $69.3 million in purchases of marketable securities, $31.6 million used to repurchase shares of our common stock, $15.7 million used for tax withholdings on restricted stock units and $6.9 million used for capital expenditures during the nine months ended December 31, 2025.

Use of Non-GAAP Financial Measures

We supplement the United States GAAP financial measures we report in quarterly and annual earnings announcements, investor presentations and other investor communications by reporting 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 adjusted EBITDA. 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 related to non-GAAP gross profit and also removes goodwill impairment charges, executive transition costs, and restructuring charges. Non-GAAP operating margin is non-GAAP income from operations expressed as a percentage of revenue. 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 as well as any loss on extinguishment of debt. Non-GAAP diluted net income per share is non-GAAP net income divided by total outstanding shares on a diluted basis. Adjusted EBITDA (formerly non-GAAP EBITDA from operations) includes the aforementioned adjustments related to non-GAAP net income and also removes interest and other expense, income taxes, and non-acquisition related depreciation from net income (GAAP). Beginning this quarter, we have renamed non-GAAP EBITDA from operations to adjusted EBITDA. We now reconcile this metric to GAAP net income, however, the adjustments included, and the resulting amounts are unchanged from prior periods. This change is intended to align terminology with common market practice.

These non-GAAP measures are not prepared 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 our results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate our 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. These non-GAAP measures should not be used to evaluate our results of operations against those of our peers or other companies, as the definitions and calculations of our non-GAAP measures may not be the same as those used by other companies, even if t

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the audited consolidated financial information and the notes thereto included in this Annual Report. In addition to historical information, the following discussion and other parts of this Annual Report contain forward-looking statements that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Actual events or results may differ materially due to the factors discussed in Item 1A. "Risk Factors" and elsewhere in this Annual Report. These factors may cause our actual results to differ materially from any forward-looking statement. See the section titled "Cautionary Statement Concerning Forward-Looking Statements" that appears at the beginning of this Annual Report.

Overview

We are an industry leader with over four decades of experience in providing enterprise network observability, carrier service assurance, cybersecurity, and DDoS, protection solutions. Our unique visibility platform and solutions are powered by our pioneering DPI, technology at scale, which is used by many Fortune 500 companies to protect their digital business services against disruption. Service providers and enterprises, including local, state and federal government agencies, rely on our solutions to achieve the visibility and protection necessary to optimize network performance, ensure the delivery of high-quality, mission-critical applications and services, gain timely insight into the end-user experience, and protect their networks from attack. The majority of our solutions are designed to provide Smart Data, a high-fidelity, decision-grade data foundation derived from real-time network activity across legacy, hybrid, and cloud-native environments. This data enables a unified view of performance, availability, and security, supports faster root-cause analysis and operational decision-making, and is increasingly used to inform broader observability platforms and automated and AI-driven workflows. With our offerings, customers can quickly, efficiently and effectively identify and resolve issues that result in downtime, service interruptions, poor service quality, or compromised data, thereby reducing mean time to resolution of issues and driving compelling returns on their investments in their networks and broader technology initiatives. Significant technology trends and catalysts for our business include the evolution of customers' digital transformation initiatives, such as migration to cloud environments and to the edges of their networks; the rapidly evolving cybersecurity threat landscape; advancements in artificial intelligence and business analytics that can enhance observability and are increasing the need for high-quality, real-time data to support automated and AI-driven operations; and the continued evolution and potential opportunities related to 5G technology across both the service provider and enterprise customer verticals.

Our operating results are influenced by a number of factors, including, but not limited to the volume, mix, and quantity of products and services sold; pricing, costs and availability of materials used in our products; growth in employee-related costs, including commissions; and the expansion of our operations. Factors that affect our ability to maximize our operating results include, but are not limited to: our ability to introduce and enhance existing products; the marketplace acceptance of those new or enhanced products; continued expansion into international markets; expansion into new or adjacent markets; development of strategic partnerships; competition; successful acquisition and integration efforts; and our ability to control costs and make improvements in a highly competitive industry.

Global and Macroeconomic Conditions

We continue to closely monitor current global and macroeconomic conditions, including the impacts of armed conflicts or warfare, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, international trade relations (including trade protection measures, such as tariffs and other trade barriers), and the risk of a recession, including the manner and extent to which they have impacted and could continue to impact our business, customers, employees, supply chain, and distribution network. In addition, our industry is experiencing AI-related supply-chain dynamics which could influence the timing and size of certain customer orders. The full extent of the impacts of these global and macroeconomic conditions remain dynamic. We remain optimistic but cognizant of ongoing macroeconomic dynamics and constrained customer spending in the service provider market and firmly focused on driving product innovation, sustaining annual revenue growth, and enhancing margins through continued disciplined cost management as we navigate the current macroeconomic landscape. As a result, we have continued our efforts to manage discretionary costs and align spending with the current environment while we continue to execute on our long-term strategic plans.

38

Table of Contents

Though we continue to monitor the impacts of evolving global and macroeconomic conditions on our business, we believe our current cash reserves and access to capital through our revolving credit facility leave us well-positioned to manage our business in today's environment. We expect net cash provided by operations combined with cash, cash equivalents, marketable securities and investments and borrowing availability under our revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, and working capital requirements over at least the next twelve months. We continue to take actions to manage costs and increase productivity throughout our company, including managing discretionary spending and hiring activities, but are continuing to invest in areas that advance our business for the future. In addition to our cash equivalents, based on covenant levels at March 31, 2026, we had an incremental $600 million available to us under our revolving credit facility.

Results Overview

Total revenue increased $36.8 million, or 4% for the fiscal year ended March 31, 2026, compared to the fiscal year ended March 31, 2025, driven by increases in both product and service revenue. Growth was supported by higher demand for service assurance and cybersecurity offerings across enterprise and service provider customer verticals. International revenue increased 8% and U.S. revenue increased 2%.

Our gross profit percentage increased by one percentage point to 79% during the fiscal year ended March 31, 2026 as compared with the fiscal year ended March 31, 2025 primarily driven by a two percentage point increase to 86% in product gross profit percentage due to a more favorable product mix associated with increased licensing of our software products.

Net income for the fiscal year ended March 31, 2026 was $95.5 million as compared with net loss for the fiscal year ended March 31, 2025 of $366.9 million. The increase of $462.5 million in net income was primarily due to the absence of goodwill impairment charges in 2026, compared to $427.0 million in goodwill impairment charges in fiscal year 2025, as well as a $36.8 million increase in revenue, a $19.6 million decrease in restructuring charges, a $5.5 million decrease in interest expense, and a $3.1 million increase in interest income. The increases to net income were partially offset by a $21.8 million increase in income tax expense, and a $17.9 million increase in employee-related expenses primarily due to an increase in variable incentive compensation.

At March 31, 2026, we had cash, cash equivalents, and marketable securities and investments (current and non-current) of $705.1 million . This represents an increase of $212.7 million compared to the fiscal year ended March 31, 2025. This increase was primarily due to $294.5 million of net cash provided by operations, $67.9 million proceeds from maturity of marketable securities, $11.8 million proceeds from sale of an equity investment, partially offset by $163.4 million used to purchase of marketable securities, $60.8 million used to repurchase shares of our common stock, $15.9 million used for tax withholdings on restricted stock units, and $9.1 million used for capital expenditures, during the fiscal year ended March 31, 2026.

39

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Use of Non-GAAP Financial Measures

We supplement the United States GAAP financial measures we report in quarterly and annual earnings announcements, investor presentations and other investor communications by reporting the following non-GAAP measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP diluted net income per share, and adjusted EBITDA. Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets, share-based compensation expense, and acquisition-related depreciation expense from gross profit (GAAP). Non-GAAP income from operations includes the aforementioned adjustments related to non-GAAP gross profit and also removes goodwill impairment charges, executive transition costs, and restructuring charges from income (loss) from operations (GAAP). 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 as well as any loss on extinguishment of debt from net income (loss) (GAAP). Non-GAAP diluted net income per share is non-GAAP net income divided by total outstanding shares on a diluted basis. Adjusted EBITDA includes the aforementioned adjustments related to non-GAAP net income and also removes interest and other expense, income taxes, and non-acquisition related depreciation from net income (GAAP). Beginning in the third quarter of fiscal year 2026, we have renamed non-GAAP EBITDA from operations to adjusted EBITDA. We now reconcile this metric to GAAP net income, however, the adjustments included, and the resulting amounts are unchanged from prior periods. This change is intended to align terminology with common market practice.

These non-GAAP measures are not prepared in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (gross profit, income (loss) from operations, net income, and diluted net income per share), and may have limitations because they do not reflect all our results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate our 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. These non-GAAP measures should not be used to evaluate our results of operations against those of our peers or other companies, as the definitions and calculations of our non-GAAP measures may not be the same as those used by other companies, even if the measures share the same name.

Management believes these non-GAAP financial measures will enhance the reader's overall understanding of our current financial performance and our 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 management plans and measures our business. We believe that providing these non-GAAP measures to investors provides them with a view of our operating results that may be more easily compared to peer companies and also enables investors to consider our operating results on both a GAAP and non-GAAP basis during and following the integration period of our acquisitions. Presenting the GAAP measures on their own may not be indicative of our core operating results. Furthermore, management 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 our financial condition and results of operations.

The following table reconciles gross profit, income (loss) from operations, net income (loss) and net income (loss) per share on a GAAP and non-GAAP basis for the fiscal years ended March 31, 2026, 2025, and 2024, respectively (dollars in thousands, except for per share data):

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Fiscal Years Ended March 31,

2026

2025

2024

Revenue

$

859,482

$

822,679

$

829,455

GAAP gross profit

$

682,494

$

643,944

$

642,043

Share-based compensation expense

9,830

9,806

10,229

Amortization of acquired intangible assets

2,202

3,978

6,549

Acquisition related depreciation expense

7

6

12

Non-GAAP gross profit

$

694,533

$

657,734

$

658,833

GAAP income (loss) from operations

$

109,825

$

(367,602

)

$

(149,826

)

Share-based compensation expense

59,948

64,785

70,799

Amortization of acquired intangible assets

46,804

50,418

56,886

Restructuring charges

883

20,500

—

Goodwill impairment

—

426,967

217,260

Acquisition related depreciation expense

48

47

119

Executive transition costs

959

—

—

Gain on divestiture of a business

—

—

(3,806

)

Legal benefit related to civil judgments

—

—

(4,380

)

Non-GAAP income from operations

$

218,467

$

195,115

$

187,052

GAAP net income (loss)

$

95,531

$

(366,922

)

$

(147,734

)

Share-based compensation expense

59,948

64,785

70,799

Amortization of acquired intangible assets

46,804

50,418

56,886

Restructuring charges

883

20,500

—

Goodwill impairment

—

426,967

217,260

Acquisition-related depreciation expense

48

47

119

Executive transition costs

959

—

—

Gain on divestiture of a business

—

—

(3,806

)

Loss on extinguishment of debt

—

1,134

—

Legal benefit related to civil judgments

—

—

(4,380

)

Change in fair value of derivative instrument

—

—

(206

)

Income tax adjustments

(22,135

)

(36,503

)

(29,828

)

Non-GAAP net income

$

182,038

$

160,426

$

159,110

GAAP diluted net income (loss) per share

$

1.30

$

(5.12

)

$

(2.07

)

Per share impact of non-GAAP adjustments identified above

1.18

7.34

4.27

Non-GAAP diluted net income per share

$

2.48

$

2.22

$

2.20

GAAP net income (loss)

$

95,531

$

(366,922

)

$

(147,734

)

Previous adjustments to determine non-GAAP net income

86,507

527,348

306,844

Non-GAAP net income

182,038

160,426

159,110

Interest and other income, net non-GAAP

(8,683

)

(2,942

)

(5,110

)

Depreciation excluding acquisition related depreciation expense

9,681

13,321

17,981

Income tax expense non-GAAP

45,112

37,631

33,052

Adjusted EBITDA

$

228,148

$

208,436

$

205,033

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Critical Accounting Policies and Estimates

We consider accounting policies and estimates related to revenue recognition, and valuation of goodwill to be critical in fully understanding and evaluating our financial results. We apply significant judgment and create estimates when applying these policies.

Revenue Recognition

We exercise judgment and use estimates in connection with determining the amounts of product and service revenues to be recognized in each accounting period.

We derive revenues primarily from the sale of network management tools and cybersecurity solutions for service provider and enterprise customers, which include hardware, software, and service offerings. Our product sales consist of offerings which include hardware appliances with embedded software that are essential to providing customers the intended functionality of the solutions, and software only offerings.

We account for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by us as an arrangement with commercial substance identifying payment terms, each party's rights and obligations regarding the products or services to be transferred and the amount we deem probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for products and services.

Product revenue is typically recognized upon fulfillment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software, and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. Our service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, stand-ready SaaS solutions and other professional services including consulting and training. We generally provide software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training.

Generally, our contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts.

Bundled arrangements are concurrent customer purchases of a combination of our product and service offerings that may be delivered at various points in time. We allocate the transaction price among the performance obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. We use a range of amounts to estimate SSP for each of the products and services sold, based primarily on the performance obligation's historical pricing. We also consider our overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, we have established SSP for a majority of our service performance obligations based on historical standalone sales. In certain instances, we have established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. SSP has primarily been established for product performance obligations as the average or median selling price the performance obligation was recently sold for, whether sold alone or sold as part of a bundle transaction. We review sales of the product performance obligations on a quarterly basis and update, when appropriate, SSP for such performance obligations to ensure that it reflects recent pricing experience. Our products are distributed through our direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. We record consideration given

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to a customer as a reduction of revenue to the extent we have recorded revenue from the customer. With limited exceptions, our return policy does not allow product returns for a refund. Returns have been insignificant to date.

Valuation of Goodwill

Goodwill is not amortized but is subject to annual impairment tests; or more frequently if events or circumstances occur (a "Triggering Event") that would indicate the fair value of our reporting unit is below its carrying value. We perform the assessment annually during the fourth quarter and on an interim basis if potential impairment indicators arise.

Reporting units are determined based on the components of a company's operating segments that constitute a business for which financial information is available and for which operating results are regularly reviewed by segment management. We have one reporting unit.

To test impairment, we first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that goodwill is impaired. If based on our qualitative assessment it is more likely than not that the fair value of the reporting unit is below its carrying amount, quantitative impairment testing is required. However, if we conclude otherwise, quantitative impairment testing is not required. The key assumption used in the quantitative impairment testing is the company-specific control premium, which is estimated using expected synergies that would be realized by a hypothetical buyer.

Comparison of Years Ended March 31, 2026 and 2025

The sections that follow discuss our consolidated statement of operations data for the fiscal years ended March 31, 2026 and March 31, 2025 including results as a percentage of revenue for those periods. For a discussion of (i) our consolidated statement of operations data for the fiscal year ended March 31, 2024 including results as a percentage of revenue for that period, as well as (ii) our liquidity and capital resources for the fiscal year ended March 31, 2024, see "Comparison of Years Ended March 31, 2025 and 2024" and "Liquidity and Capital Resources" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on May 15, 2025.

Results of Operations

Revenue

Total revenue increased $36.8 million, or 4% for the fiscal year ended March 31, 2026, compared to the fiscal year ended March 31, 2025, driven by increases in both product and service revenue. Service revenue increased 6%, primarily due to the timing and composition of maintenance and contract renewals and continued expansion of cloud and subscription services. Product revenue increased 3%, driven by increased service provider demand for cybersecurity offerings, as well as increased U.S. Government agency orders across both service assurance and cybersecurity offerings. International revenue increased 8%, benefiting from increased enterprise and service provider demand, and U.S. revenue increased 2%, benefiting from increased enterprise demand. By product line, cybersecurity revenue increased 8% and service assurance revenue increased 3%, both supported by the timing of maintenance renewals. The increase in revenue from the cybersecurity product line compared to the same period last year was due to an increase in revenue from service provider and enterprise customers. The increase in revenue from the service assurance product line compared to the same period last year was due to an increase in revenue from enterprise customers, partially offset by a decrease in service provider product revenue. From a customer-vertical perspective, service provider revenue increased 3%, driven by an increase in service revenue. Enterprise revenue increased 5%, driven by an increase in both product and service revenue.

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Revenue:

Product

$

370,145

43

%

$

359,894

44

%

$

10,251

3

%

Service

489,337

57

462,785

56

26,552

6

%

$

859,482

100

 %

$

822,679

100

 %

$

36,803

4

%

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Total revenue by geography was as follows:

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

United States

$

474,359

55

%

$

465,470

57

 %

$

8,889

2

%

International:

Europe

158,766

19

156,715

19

2,051

1

%

Asia

63,075

7

63,624

8

(549

)

(1

)%

Rest of the world

163,282

19

136,870

16

26,412

19

%

Subtotal international

385,123

45

357,209

43

27,914

8

%

Total revenue

$

859,482

100

%

$

822,679

100

 %

$

36,803

4

%

Total revenue by product line was as follows:

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Revenue:

Service assurance

$

547,021

64

%

$

532,884

65

%

$

14,137

3

%

Cybersecurity

312,461

36

289,795

35

22,666

8

%

Total revenue

$

859,482

100

%

$

822,679

100

%

$

36,803

4

%

Total revenue by customer vertical was as follows:

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Revenue:

Service provider

$

362,510

42

%

$

350,968

43

%

$

11,542

3

%

Enterprise

496,972

58

471,711

57

25,261

5

%

Total revenue

$

859,482

100

%

$

822,679

100

%

$

36,803

4

%

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Cost of Revenue and Gross Profit

Cost of product revenue consists primarily of material components, personnel expenses, packaging materials, overhead and amortization of acquired developed technology. Cost of service revenue consists primarily of personnel, material, overhead and support costs.

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Cost of revenue:

Product

$

50,594

6

%

$

57,463

7

%

$

(6,869

)

(12

)%

Service

126,394

15

121,272

15

5,122

4

Total cost of revenue

$

176,988

21

%

$

178,735

22

%

$

(1,747

)

(1

)%

Gross profit:

Product $

$

319,551

37

%

$

302,431

37

%

$

17,120

6

%

Product gross profit %

86

%

84

%

2

%

Service $

362,943

42

%

341,513

42

%

21,430

6

%

Service gross profit %

74

%

74

%

0

%

Total gross profit $

$

682,494

$

643,944

$

38,550

6

%

Total gross profit %

79

%

78

%

1

%

Product. The 12%, or $6.9 million, decrease in cost of product revenue for the fiscal year ended March 31, 2026, despite a 3% increase in total product revenue compared to the same period last year, was primarily driven a more favorable product mix associated with increased licensing of our software products. Our product gross profit percentage increased two percentage points during the fiscal year ended March 31, 2026 compared to the same period in the prior year, primarily due to favorable product mix.

Service. The 4%, or $5.1 million, increase in cost of service revenue for the fiscal year ended March 31, 2026 compared to the same period last year was primarily driven by a $26.6 million, or 6% increase, in service revenue, and an increase in employee-related variable incentive compensation. Our service gross profit percentage remained consistent at 74% during the fiscal year ended March 31, 2026 compared to the same period in the prior year.

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Operating Expenses

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Research and development

$

159,461

19

%

$

152,864

19

%

$

6,597

4

%

Sales and marketing

264,538

31

268,051

32

(3,513

)

(1

)%

General and administrative

103,185

12

96,724

12

6,461

7

%

Amortization of acquired intangible assets

44,602

5

46,440

6

(1,838

)

(4

)%

Restructuring charges

883

—

20,500

2

(19,617

)

(96

)%

Goodwill impairment

—

—

426,967

52

(426,967

)

(100

)%

Total operating expenses

$

572,669

67

%

$

1,011,546

123

%

$

(438,877

)

(43

)%

Research and development. Research and development expenses consist primarily of personnel expenses, fees for outside consultants, overhead and related expenses associated with the development of new products and the enhancement of existing products.

The 4%, or $6.6 million, increase in research and development expenses for the fiscal year ended March 31, 2026 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation, partially offset by a $1.4 million decrease in depreciation expense and a $1.2 million increase in software capitalization.

Sales and marketing. Sales and marketing expenses consist primarily of personnel expenses and commissions, overhead and other expenses associated with selling activities and marketing programs such as trade shows, seminars, advertising, and new product launch activities.

The 1%, or $3.5 million, decrease in sales and marketing expenses for the fiscal year ended March 31, 2026 compared to the same period last year was primarily due to a $1.9 million decrease in expenses associated with events and a $1.8 million decrease in employee-related expenses due to a reduction in headcount, partially offset by an increase in employee-related variable incentive compensation.

General and administrative. General and administrative expenses consist primarily of personnel expenses for executive, financial, legal, and human resource employees, overhead, and other corporate expenditures.

The 7%, or $6.5 million, increase in general and administrative expenses for the fiscal year ended March 31, 2026 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation, a $1.8 million increase in professional services, a $1.0 million increase in software expenses, partially offset by a $2.3 million increase in software capitalization.

Restructuring charges. During the first quarter of fiscal year 2025, we implemented a voluntary separation program for employees who met certain age and service requirements to reduce overall headcount. As a result of the related workforce reduction, during the fiscal year ended March 31, 2025, we recorded restructuring charges totaling $19.6 million related to one-time termination benefits for one hundred forty-two employees who voluntarily terminated their employment with us during that period. During the third quarter of fiscal year 2025, we also entered into transition agreements that provided termination benefits for certain employees to ensure an orderly transition of responsibilities for continuity purposes. As a result of these related workforce changes, during the fiscal year ended March 31, 2026 and 2025, we recorded restructuring charges in each year totaling $0.9 million, respectively.

Goodwill impairment. During the first quarter of fiscal year 2025, due to a decrease in our stock price and overall market capitalization, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, it was determined a Triggering Event occurred, indicating goodwill may be impaired. Accordingly, we conducted an interim quantitative impairment test of our goodwill at June 30, 2024 using the market approach to estimate the fair value of its reporting unit. As a result of that interim impairment test, we recorded a $427.0 million goodwill impairment charge during the fiscal year ended March 31, 2025.

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Interest and Other Income, Net

Interest and other income, net includes interest earned on our cash, cash equivalents and marketable securities, interest expense and other non-operating gains or losses.

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Interest and other income, net

$

8,683

1

%

$

1,808

—

%

$

6,875

380

%

The 380%, or $6.9 million, increase in interest and other income, net for the fiscal year ended March 31, 2026 compared to the same period last year was primarily due to a $5.5 million decrease in interest expense and a $3.1 million increase in interest income. This increase was partially offset by a $1.6 million increase in foreign exchange expense.

Income Tax Expense

In 2021, the Organization for Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently multiple sets of administrative guidance have been issued, including the release of a comprehensive Side-by-Side Package announced by the OECD in January 2026. Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact legislation in future years. Considering we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules are not expected to materially increase our global tax costs. There remains uncertainty as to the final Pillar Two model rules. We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.

The annual effective tax rate for the fiscal year ended March 31, 2026 was 19.4%, compared to an annual effective tax rate of 0.3% for the fiscal year ended March 31, 2025. The effective tax rate for the fiscal year ended March 31, 2026 is different than the effective rate for the fiscal year ended March 31, 2025, primarily due to a significant nondeductible goodwill impairment charge, a discrete benefit related to the finalization of our tax return filings, and a charge related to stock compensation.

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Change

% of

Revenue

% of

Revenue

$

%

Income tax expense

$

22,977

3

%

$

1,128

—

%

$

21,849

1937

%

Commitment and Contingencies

We account for claims and contingencies in accordance with authoritative guidance that requires us to record an estimated loss from a claim or loss contingency when information available prior to issuance of our consolidated financial statements indicates that it is probable that a liability has been incurred at the date of the consolidated financial statements, and the amount of the loss can be reasonably estimated. If we determine that it is reasonably possible, but not probable, that an asset has been impaired or a liability has been incurred, or if the amount of a probable loss cannot be reasonably estimated, then, in accordance with the authoritative guidance, we disclose the amount or range of estimated loss if the amount or range of estimated loss is material. Accounting for claims and contingencies requires us to use our judgment. We consult with legal counsel on those issues related to litigation and seek input from other experts and advisors with respect to matters in the ordinary course of business.

Legal -From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, none of our current legal proceedings and claims, if determined adversely and based on the information known to the

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management as of the date of this Annual Report, is expected to have a material adverse effect on our financial condition, results of operations or cash flows.

Warranty and Indemnification- We warrant that our software and hardware products will substantially conform to the documentation accompanying such products on their original date of shipment. For software, which also includes firmware, the standard warranty commences upon shipment and generally expires 60 to 90 days thereafter. With regard to hardware, the standard warranty commences upon shipment and generally expires 60 days to 12 months thereafter. Additionally, this warranty is subject to various exclusions which include, but are not limited to, non-conformance resulting from modifications made to the software or hardware by a party other than NetScout; customers' failure to follow our installation, operation or maintenance instructions; and events outside of our reasonable control. We also warrant that all support services will be performed in a good and workmanlike manner. We believe that our product and support service warranties are consistent with commonly accepted industry standards. Warranty cost information is presented, and no material warranty costs are accrued since service revenue associated with warranty is deferred at the time of sale and recognized ratably over the warranty period.

Contracts that we enter into in the ordinary course of business may contain standard indemnification provisions. Pursuant to these agreements, we may agree to defend third party claims brought against a partner or direct customer claiming infringement of such third party’s (i) U.S. patent and/or European Union (EU), or other selected countries' patents, (ii) Berne convention member country copyright, and/or (iii) U.S., EU, and/or other selected countries’ trademark or intellectual property rights. Moreover, this indemnity may require us to pay any damages awarded against the partner or direct customer in such type of lawsuit as well as reimburse the partner or direct customer for reasonable attorney's fees incurred by them from the lawsuit.

We may also agree from time to time to provide other forms of indemnification to partners or direct customers, such as indemnification that would obligate us to defend and pay any damages awarded to a third party against a partner or direct customer based on a lawsuit alleging that such third party has suffered personal injury or tangible property damage legally determined to have been caused by negligently designed or manufactured products.

We have agreed to indemnify our directors and officers and our subsidiaries' directors and officers if they are made a party or are threatened to be made a party to any proceeding (other than an action by or in the right of NetScout) by reason of the fact that the indemnified are agents of NetScout. The indemnity is for any and all expenses and liabilities of any type (including but not limited to, judgments, fines and amounts paid in settlement) reasonably incurred by the directors or officers in connection with the investigation, defense, settlement or appeal of such proceeding, provided they acted in good faith.

Liquidity and Capital Resources

Cash, cash equivalents and marketable securities and investments consisted of the following (in thousands):

As of March 31,

(Dollars in Thousands)

2026

2025

Cash and cash equivalents

$

586,499

$

457,415

Short-term marketable securities and investments

81,458

34,058

Long-term marketable securities

37,188

1,004

Cash, cash equivalents, marketable securities and investments

$

705,145

$

492,477

Cash, cash equivalents, marketable securities and investments

At March 31, 2026, cash, cash equivalents, marketable securities and investments (current and non-current) totaled $705.1 million. This represents an increase of $212.7 million from $492.5 million at March 31, 2025. This increase was primarily due to $294.5 million of net cash provided by operations, $67.9 million proceeds from maturity of marketable securities, $11.8 million proceeds from sale of equity investment, partially offset by $163.4 million used to purchase marketable securities, $60.8 million used to repurchase shares of our common stock, $15.9 million used for tax withholdings on restricted stock units, and $9.1 million used for capital expenditures during the fiscal year ended March 31, 2026.

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At March 31, 2026, cash, short-term and long-term marketable securities in the United States was approximately $488.4 million, while cash and short-term investments held outside of the United States was approximately $216.7 million.

Cash and cash equivalents were impacted by the following:

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Net cash provided by operating activities

$

294,538

$

217,670

Net cash used in investing activities

$

(92,830

)

$

(6,996

)

Net cash used in financing activities

$

(76,691

)

$

(142,011

)

Net cash from operating activities

Fiscal year 2026 compared to fiscal year 2025

Net cash provided by operating activities of $294.5 million for year ended March 31, 2026, was primarily attributable to net income, as adjusted for share-based compensation expense, depreciation and amortization, deferred income taxes, operating lease right-of-use assets, and a $99.8 million working capital inflow. The working capital inflow was primarily driven by a $49.2 million increase in deferred revenue, a $35.1 million increase in accrued compensation, a $12.4 million decrease in accounts receivable, a $10.9 million decrease in prepaid expenses, a $4.7 million increase in accounts payable, partially offset by a $11.6 million decrease in operating lease liabilities.

Net cash from investing activities

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Net cash used in investing activities included the following:

Purchase of marketable securities and investments

$

(163,365

)

$

(45,061

)

Proceeds from sales and maturity of marketable securities

67,875

44,762

Purchase of fixed assets

(9,112

)

(5,407

)

Purchase of intangible assets

—

(1,290

)

Proceeds from sale of equity investment

11,772

—

$

(92,830

)

$

(6,996

)

Net cash used in investing activities increased by $85.8 million to $92.8 million of net cash used in investing activities during the fiscal year ended March 31, 2026, compared to $7.0 million of net cash used in investing activities during the fiscal year ended March 31, 2025. The $85.8 million increase in net cash used in investing activities was partially due to an additional $118.3 million in purchase of marketable securities, and an additional $3.7 million used to purchase of fixed assets during the fiscal year ended March 31, 2026, compared with the fiscal year ended March 31, 2025. These increases in cash were partially offset by an additional $23.1 million in proceeds from maturity of marketable securities, and an $11.8 million in proceeds from the sale of our entire Napatech equity investment during the fiscal year ended March 31, 2026, compared with the fiscal year ended March 31, 2025.

Our investments in property and equipment consist primarily of computer equipment and internal use software, demonstration units, office equipment and facility improvements. We plan to continue to invest in capital expenditures to support our infrastructure in our fiscal year 2027.

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Net cash from financing activities

Fiscal Years Ended March 31,

(Dollars in Thousands)

2026

2025

Net cash used in financing activities included the following:

Issuance of common stock under stock plans

$

2

$

3

Treasury stock repurchases

(60,799

)

(25,257

)

Tax withholding on restricted stock units

(15,894

)

(13,962

)

Payment of debt issuance costs

—

(2,795

)

Repayment of long-term debt

—

(175,000

)

Proceeds from issuance of long-term debt, net of issuance costs

—

75,000

$

(76,691

)

$

(142,011

)

Net cash used in financing activities decreased $65.3 million to $76.7 million during the fiscal year ended March 31, 2026, compared to $142.0 million of net cash used in financing activities during the fiscal year ended March 31, 2025.

During the fiscal year ended March 31, 2026, we repurchased approximately 2.5 million shares of our common stock for $60.8 million in the open market under our 2022 Share Repurchase Program. During the fiscal year ended March 31, 2025, we repurchased a total of approximately 1.4 million shares of our common stock for $25.3 million in the open market under our 2022 Share Repurchase Program.

There was no debt outstanding during the fiscal year ended March 31, 2026. During the fiscal year ended March 31, 2025, we repaid a net $100.0 million of borrowings under the Third Amended and Restated Credit Agreement, and we paid $2.8 million in debt issuance costs related to the execution of our Third Amended and Restated Credit Agreement.

Sources of Cash and Cash Requirements

Credit Facility

We have a five-year, $600 million senior secured revolving credit facility under our Third Amended and Restated Credit Agreement, which matures on October 4, 2029. The facility includes a $75 million letter-of-credit sub-facility and may be used for working capital and other general corporate purposes.

We had no outstanding borrowings under the facility at March 31, 2026 or March 31, 2025, and the full commitment was available. Borrowings under the facility bear interest at variable rates based on term SOFR or an alternate base rate, plus an applicable margin. We also pay commitment fees on the unused portion of the facility.

The credit agreement contains customary covenants, including a consolidated net leverage ratio requirement and certain limitations on additional indebtedness, liens, investments, dividends, and other matters. We were in compliance with all covenants as of March 31, 2026.

Contractual Obligations

Our contractual obligations at March 31, 2026 consisted mainly of (i) unconditional purchase obligations, primarily under purchase orders to purchase inventory as well as commitments for products and services used in the normal course of business (see Commitments and Contingencies, Note 19 to the Consolidated Financial Statements), (ii) operating lease obligations (see Leases, Note 18 to the Consolidated Financial Statements), and (iii) pension benefit plan (see Pension Benefit Plans, Note 16 to the Consolidated Financial Statements).

At March 31, 2026, the total accrual of our retirement obligation for our chairman and CEO was $1.2 million. The payment stream for this retirement obligation is based upon the retirement date which is currently not determinable.

At March 31, 2026, the total amount of net unrecognized tax benefits for uncertain tax positions and the accrual for the related interest was $0.9 million. We are unable to make a reliable estimate when cash settlement, if any, will occur with a tax authority as the timing of examinations and ultimate resolution of those examinations is uncertain.

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Cash Requirements

We are actively managing the business to generate cash flow and believe that we currently have adequate liquidity. We believe that these factors will allow us to meet our anticipated funding requirements for at least the next twelve months and the foreseeable future.

We have contractual obligations for operating leases, unconditional purchase obligations, pension benefits plans and certain other long-term liabilities. We expect net cash provided by operating activities combined with cash, cash equivalents, marketable securities and investments and borrowing availability under our revolving credit facility will provide sufficient liquidity to fund current obligations, capital spending, and working capital requirements over at least the next twelve months and the foreseeable future. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and our revolving credit facility. However, macroeconomic conditions, including high inflation and interest rates, and international trade relations (including trade protections measures, such as tariffs and other trade barriers), could increase our anticipated funding requirements or make it more difficult for us to access capital.

A portion of our cash may be used to acquire or invest in complementary businesses or products, to obtain the right to use complementary technologies, or to repurchase shares of our common stock through our stock repurchase programs. From time to time, in the ordinary course of business, we evaluate potential acquisitions of such businesses, products or technologies. If our existing sources of liquidity are insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities. Macroeconomic conditions, including high interest rates and volatility in the capital markets, may make it difficult for us to secure additional financing on favorable terms or at all. Any sale of additional equity or debt securities could result in additional dilution to our stockholders

Recent Accounting Standards

For information with respect to recent accounting pronouncements on our consolidated financial statements, See Note 2 contained in the "Notes to Consolidated Financial Statements" included in Part IV of this Annual Report.

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