Contradicting Signals: Navigating Macroeconomic Impacts and Growth Opportunities in Cybersecurity During 2025 Q4 Call

None



Revenue Performance and Backlog Offset:
- NetScout achieved a fiscal year 2025 revenue of approximately $823 million, essentially flat year over year, down less than 1%.
- Despite the divestiture of the Test Optimization business and backlog-driven revenue gains from the prior fiscal year, fiscal year 2025 revenue was consistent year over year when adjusted for the sale of the Test Optimization business.
- The company was able to offset the backlog benefits from the prior year by generating approximately $50 million in additional revenue, driven by prudent cost management initiatives.

Cybersecurity Growth and Demand:
- NetScout's Cybersecurity offerings delivered nearly 7% year-over-year revenue growth in fiscal year 2025, driven by strong momentum within the enterprise customer vertical.
- This was attributed to increased geopolitical tensions, the rise in DDoS attacks, and the heightened sophistication of attacks, which led to greater demand for real-time adaptable solutions.

Service Assurance Revenue Trends:
- Service Assurance revenue declined approximately 4% year over year in fiscal year 2025, partially due to the divestiture of the Test Optimization business and lower radio frequency modeling project revenue.
- The decline was also influenced by service provider customers investing in 5G initiatives at a measured pace and focusing on network performance and new services like Fixed Wireless Access.

Outlook and Strategic Focus:
- For fiscal year 2026, NetScout anticipates year-over-year revenue growth, improved operating margins, and improved diluted EPS performance.
- The company remains committed to investing in product-related AI and cybersecurity solutions, maintaining disciplined cost management, and preserving its strong financial position to navigate economic uncertainties.