NetScout Systems (NTCT) Q4 2026 earnings summary

Executive summary

• Achieved strong fiscal year 2026 results with 4.5% revenue growth to $859.5 million, margin expansion, and key strategic objectives met in both cybersecurity and service assurance segments.

• Introduced new AI-ready smart data, expanded observability, enhanced edge visibility, and adaptive threat protection, reinforcing innovation despite a dynamic macro environment.

• Completed acquisition of DigiCert’s DDoS protection assets, bringing Arbor Cloud infrastructure in-house and adding recurring cloud DDoS revenue.

• Secured significant customer wins, including a large European telecom and a global chip manufacturer, highlighting traction in both new and repeat business.

• 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 4.5% 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); operating margin for the year was 25.4% (up 1.7 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

• FY 2027 revenue expected between $885 million and $915 million; non-GAAP diluted EPS projected at $2.65–$2.80, both up year-over-year.

• DigiCert DDoS asset acquisition expected to contribute ~$20 million annualized revenue, partially benefiting FY 2027.

• GAAP net income per diluted share projected at $1.55–$1.70 for FY 2027.

• Non-GAAP effective tax rate expected at ~20%; diluted shares outstanding at 74–75 million.

• Q1 FY 2027 revenue to grow mid-single digits; EPS to grow at about twice the revenue growth rate year-over-year.