NetScout Systems (NASDAQ:NTCT) Posts Quarterly Earnings Results, Beats Estimates By $0.14 EPS

Key Points

• NetScout exceeded quarterly expectations: Revenue rose 12.7% year over year to $210.42 million, while EPS reached $0.52 versus the $0.38 consensus estimate. Gross and operating margins also improved.
• Service assurance revenue grew about 20%, driven partly by government orders and demand for Omnis products, while cybersecurity revenue was nearly flat at 0.6% growth.
• Fiscal 2027 guidance was reaffirmed at $885 million–$915 million in revenue and $2.65–$2.80 in non-GAAP EPS, though $10 million–$15 million of government orders pulled into the first quarter is expected to limit second-quarter and first-half growth.

NetScout Systems (NASDAQ:NTCT - Get Free Report) released its quarterly earnings results on Thursday. The technology company reported $0.52 earnings per share for the quarter, beating analysts' consensus estimates of $0.38 by $0.14, FiscalAI reports. The company had revenue of $210.42 million during the quarter, compared to the consensus estimate of $196.17 million. NetScout Systems had a net margin of 13.71% and a return on equity of 9.25%. The firm's quarterly revenue was up 12.7% on a year-over-year basis. During the same period in the previous year, the business earned $0.34 earnings per share. NetScout Systems updated its FY 2027 guidance to 2.650-2.800 EPS.

Here are the key takeaways from NetScout Systems' conference call:

• First-quarter revenue rose 13% to $210.4 million, while non-GAAP EPS increased to $0.52 from $0.34; gross margin expanded to 80.6% and operating margin improved to 20.8%.
• Service assurance revenue grew approximately 20%, supported partly by government orders and demand for Omnis Sensor and Omnis Streamer; management said the company has a solid pipeline for these AI-related offerings.
• Government-related orders totaling roughly $10 million to $15 million were pulled into the first quarter, and management expects second-quarter revenue to be broadly consistent with the prior year, resulting in only mid-single-digit first-half growth.
• Cybersecurity revenue increased just 0.6% year over year against a difficult prior-year comparison, although the DigiCert DDoS asset acquisition and capacity expansion doubled mitigation capability to 30 terabits per second and could improve recurring revenue margins over time.
• NetScout reaffirmed its fiscal 2027 outlook of $885 million to $915 million in revenue and $2.65 to $2.80 in non-GAAP EPS, while continuing to invest in AI-ready Smart Data, observability, cybersecurity, and adaptive DDoS protection.

NetScout Systems Price Performance

Shares of NTCT stock traded down $1.69 on Friday, hitting $38.44. 763,675 shares of the company's stock were exchanged, compared to its average volume of 518,361. NetScout Systems has a 12 month low of $21.21 and a 12 month high of $45.28. The stock has a market cap of $2.79 billion, a P/E ratio of 23.44 and a beta of 0.69. The company has a 50 day moving average of $41.24 and a 200 day moving average of $35.39.

Insider Transactions at NetScout Systems

In other NetScout Systems news, EVP John Downing sold 8,000 shares of NetScout Systems stock in a transaction dated Monday, June 8th. The stock was sold at an average price of $40.29, for a total value of $322,320.00. Following the transaction, the executive vice president owned 129,121 shares in the company, valued at $5,202,285.09. The trade was a 5.83% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Alfred Grasso sold 5,000 shares of the stock in a transaction dated Tuesday, May 12th. The stock was sold at an average price of $40.67, for a total transaction of $203,350.00. Following the completion of the transaction, the director directly owned 35,000 shares of the company's stock, valued at $1,423,450. This trade represents a 12.50% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 4.74% of the company's stock.

Institutional Investors Weigh In On NetScout Systems

A number of institutional investors have recently added to or reduced their stakes in the business. Invesco Ltd. increased its position in NetScout Systems by 53.2% in the 4th quarter. Invesco Ltd. now owns 432,109 shares of the technology company's stock valued at $11,693,000 after acquiring an additional 150,076 shares during the period. Mercer Global Advisors Inc. ADV lifted its holdings in shares of NetScout Systems by 27.8% during the fourth quarter. Mercer Global Advisors Inc. ADV now owns 22,493 shares of the technology company's stock worth $609,000 after purchasing an additional 4,887 shares during the period. State of Tennessee Department of Treasury lifted its holdings in shares of NetScout Systems by 34.0% during the fourth quarter. State of Tennessee Department of Treasury now owns 39,894 shares of the technology company's stock worth $1,109,000 after purchasing an additional 10,119 shares during the period. EP Wealth Advisors LLC bought a new stake in shares of NetScout Systems in the fourth quarter worth $218,000. Finally, Susquehanna Fundamental Investments LLC grew its stake in shares of NetScout Systems by 413.4% in the fourth quarter. Susquehanna Fundamental Investments LLC now owns 68,879 shares of the technology company's stock worth $1,864,000 after purchasing an additional 55,462 shares during the last quarter. 91.64% of the stock is owned by institutional investors.

Analysts Set New Price Targets

NTCT has been the subject of several recent analyst reports. Wall Street Zen raised shares of NetScout Systems from a "buy" rating to a "strong-buy" rating in a research report on Saturday. Zacks Research lowered shares of NetScout Systems from a "strong-buy" rating to a "hold" rating in a report on Thursday, July 9th. Weiss Ratings restated a "hold (c)" rating on shares of NetScout Systems in a research report on Friday, July 31st. Finally, Royal Bank Of Canada upped their price target on shares of NetScout Systems from $29.00 to $38.00 and gave the stock a "sector perform" rating in a report on Friday, May 8th. One investment analyst has rated the stock with a Strong Buy rating and three have issued a Hold rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $35.50.

About NetScout Systems

NetScout Systems, Inc is a leading provider of network performance management, service assurance and cybersecurity solutions. The company designs and delivers hardware and software platforms that capture and analyze real-time and historical packet data, enabling IT teams and service providers to monitor application performance, troubleshoot network issues and defend against distributed denial-of-service (DDoS) attacks. NetScout's flagship offerings include the nGeniusONE service assurance platform and the InfiniStream packet broker, which together provide end-to-end visibility across hybrid and multi-cloud environments.

Founded in 1984 and headquartered in Westford, Massachusetts, NetScout has built a reputation for scalable and resilient monitoring infrastructure.

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