GuruFocus -
- Revenue (Q2 FY2025): $191 million, down approximately 3% year-over-year.
- Revenue (First Half FY2025): $366 million, down approximately 10% year-over-year.
- Earnings Per Share (Q2 FY2025): $0.47, down from $0.61 in the prior year.
- Gross Profit Margin (Q2 FY2025): 79.7%, down 0.6 percentage points year-over-year.
- Operating Profit Margin (Q2 FY2025): 23.1%, compared to 28% in the prior year.
- Service Assurance Revenue (First Half FY2025): Down approximately 13% year-over-year.
- Cybersecurity Revenue (First Half FY2025): Down approximately 4% year-over-year.
- Cash and Equivalents (End of Q2 FY2025): $401.9 million, a decrease of $22.3 million since the end of FY2024.
- Free Cash Flow (Q2 FY2025): A use of $5.8 million.
- Debt (End of Q2 FY2025): $75 million outstanding on the revolving credit facility.
- Share Repurchase (Q2 FY2025): Approximately 14,000 shares repurchased for $257,000.
- Fiscal Year 2025 Revenue Guidance: $800 million to $830 million.
- Fiscal Year 2025 EPS Guidance: $2.00 to $2.30.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NetScout Systems Inc (NASDAQ:NTCT) delivered Q2 fiscal year 2025 revenue and earnings results in line with expectations.
- The company released several products and product enhancements aligned with key technology trends, including AI-ready smart data solutions.
- NetScout Systems Inc (NASDAQ:NTCT) had a strong turnout and interest in its recent annual Engaged Technology and User summit.
- The company reaffirmed its full fiscal year 2025 non-GAAP revenue and EPS outlooks.
- NetScout Systems Inc (NASDAQ:NTCT) completed the majority of its voluntary separation program, expecting a benefit of approximately $25 million in annualized cost reduction.
- Q2 revenue was approximately $191 million, down 3% compared to the prior year period.
- Earnings per share for the second quarter was down approximately 23 cents from the prior year.
- First half fiscal year 2025 revenue was approximately $366 million, down 10% year over year.
- Service assurance revenue for the first half of fiscal year 2025 was down approximately 13% year over year.
- Cybersecurity revenue decreased by 4% for the first half of fiscal year 2025, primarily due to backlog-related headwinds.
A: Anil Singhal, Co-founder, President, CEO, and Chairman of the Board, mentioned that the guidance range accounts for potential upsides, including a budget flush. Typically, Q3 is better than Q4 in terms of bookings due to budget flushes from large companies and carriers.
Q: What is driving growth in cybersecurity, and how is it tracking against internal expectations for double-digit growth?
A: Anil Singhal noted a pivot in their cybersecurity positioning to cover market gaps, particularly in analytics. While traction is slow, they expect to see results over the next 6 to 12 months, with new positioning ideas for their Omnis Cyber Intelligence solution.
Q: How does Verizon (NYSE:VZ)'s move towards standalone 5G impact your opportunities and risks?
A: Anil Singhal explained that while market consolidation affects business, 5G slicing presents a revenue opportunity. Slicing is an optional module in their solution, and they are engaging with initial customers interested in this functionality.
Q: How does the convergence of mobile and fiber broadband affect your solutions?
A: Anil Singhal stated that carriers monitoring user plans will drive more business as fixed wireless initiatives grow. They expect a dramatic uptick in fixed wireless traffic, which could lead to increased investments.
Q: Can you provide an update on your AIOps strategy and expected contributions from partners?
A: Anil Singhal mentioned that while there is significant interest and discussions with customers and partners, they do not expect a major impact from AIOps this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.