Netscout ((NTCT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The latest earnings call from NETSCOUT painted a largely positive picture, with the company showcasing strong revenue and earnings growth. This optimistic outlook is primarily fueled by advancements in cybersecurity and new product enhancements. The company also highlighted successful customer acquisitions and a robust liquidity position. However, challenges such as a decline in service provider revenue and macroeconomic uncertainties were acknowledged.
Strong Revenue Growth
NETSCOUT reported a revenue of approximately $187 million for Q1 of fiscal year 2026, marking a 7% year-over-year increase. This growth was significantly driven by the company’s strong performance in the cybersecurity sector.
Increased Earnings
The company saw a 21% year-over-year increase in non-GAAP diluted earnings per share, reaching $0.34. This improvement reflects the benefits of restructuring and cost management initiatives.
Cybersecurity Revenue Surge
Cybersecurity revenue surged by 18% year-over-year, propelled by robust growth in both enterprise and service provider customer verticals.
Successful Product Enhancements
NETSCOUT introduced new AI-backed enhancements to its Arbor Edge Defense and Arbor Enterprise Manager Adaptive DDoS solutions, aimed at enhancing defense capabilities and improving reporting.
Major Customer Wins
The company secured significant deals, including a high 7-figure order with a U.S. government agency and a low 7-figure deal with a major Latin American financial institution, demonstrating strong traction in both service assurance and cybersecurity solutions.
Strong Liquidity Position
NETSCOUT ended the first quarter with $543.5 million in cash, cash equivalents, and marketable securities, marking an increase of $51 million since the end of fiscal year 2025.
Service Provider Revenue Decline
Despite growth in the enterprise customer vertical, service provider customer vertical revenue decreased by 5.6% year-over-year.
Minor Service Revenue Increase
Service revenue saw a modest increase of 0.3% year-over-year, highlighting a slower growth rate compared to product revenue.
Macro-Economic Uncertainty
The company remains cautious amid ongoing macroeconomic uncertainty, which may impact future performance.
Forward-Looking Guidance
NETSCOUT reaffirmed its fiscal year 2026 revenue guidance of $825 million to $865 million and non-GAAP EPS of $2.25 to $2.40. The company continues to focus on expanding its cybersecurity offerings, including AI-backed solutions and alignment with the NIST Zero-Trust security framework, to reinforce its strategic position in the market.
In summary, NETSCOUT’s earnings call highlighted a positive trajectory with strong revenue and earnings growth, driven by advancements in cybersecurity and strategic customer wins. While challenges such as service provider revenue decline and macroeconomic uncertainties were noted, the company’s robust liquidity position and forward-looking guidance suggest a promising outlook for the fiscal year 2026.