NetScout Systems (NTCT) Q4 2026 earnings summary

Executive summary

• Fiscal year 2026 delivered strong results with 4.5% revenue growth to $859.5 million, margin expansion, and innovation in cybersecurity and service assurance, meeting key strategic objectives.

• Accelerated product innovation, including AI-ready smart data and adaptive threat protection, despite a dynamic macro environment.

• Completed the acquisition of DigiCert Inc.'s DDoS protection business, enhancing cloud-based service capabilities and expected to be immediately accretive.

• Secured significant customer wins, including a large European telecom and a global chip manufacturer.

• Service revenue increased 5.7% for the year, offsetting a 9.8% Q4 decline in product revenue.

Financial highlights

• Q4 revenue was $203 million, down 1% year-over-year; full-year revenue grew to $859.5 million.

• Q4 diluted EPS was $0.52, flat year-over-year; full-year non-GAAP diluted EPS rose 11.7% to $2.48, exceeding guidance.

• Full-year non-GAAP net income was $182.0 million; GAAP net income was $95.5 million, or $1.30 per diluted share.

• Gross margin for Q4 was 79.7% (up 0.5 pts); full-year gross margin was 80.8% (up 0.8 pts).

• Free cash flow reached $285.4 million for the year, with $705.1 million in cash and securities at year-end.

Outlook and guidance

• Fiscal 2027 revenue expected between $885 million and $915 million; non-GAAP EPS between $2.65 and $2.80, with GAAP EPS projected at $1.55–$1.70.

• Guidance includes DigiCert DDoS asset acquisition, expected to contribute $20 million annualized revenue and be immediately accretive.

• Q1 FY27 revenue projected to grow mid-single digits; EPS to grow at about twice the revenue growth rate.

• Non-GAAP effective tax rate anticipated at ~20%, with 74–75 million diluted shares outstanding.

• Continued focus on innovation, cost management, and balanced capital allocation.