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• Revenue (Q3 FY2025): Approximately $252 million, up 16% year-over-year.

• Diluted Earnings Per Share (Q3 FY2025): $0.94, up 29% from the previous year.

• Revenue (First 9 Months FY2025): Approximately $618 million, down 1% year-over-year.

• Diluted Earnings Per Share (First 9 Months FY2025): $1.70, up 3% year-over-year.

• Service Assurance Revenue (Q3 FY2025): Increased approximately 9%.

• Service Assurance Revenue (First 9 Months FY2025): Down approximately 5.5%.

• Cyber Security Revenue (Q3 FY2025): Increased approximately 29%.

• Cyber Security Revenue (First 9 Months FY2025): Increased approximately 7.4%.

• Gross Profit Margin (Q3 FY2025): 82.8%, up 1 percentage point.

• Operating Profit Margin (Q3 FY2025): 35.6%, compared to 29% in the same quarter last year.

• Free Cash Flow (Q3 FY2025): $39.6 million.

• Cash and Investments (End of Q3 FY2025): $427.9 million.

• Debt (End of Q3 FY2025): $75 million outstanding on a $600 million revolving credit facility.

• Days Sales Outstanding (DSO) (End of Q3 FY2025): 75 days, down from 90 days in the prior year.

• Fiscal Year 2025 Revenue Outlook: $810 million to $820 million.

• Fiscal Year 2025 Non-GAAP EPS Outlook: $2.15 to $2.25.

• Warning! GuruFocus has detected 5 Warning Sign with NTCT.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NetScout Systems Inc (NASDAQ:NTCT) exceeded expectations in Q3 fiscal year 2025 with strong performance across both Cyber Security and Service Assurance product lines.

• Revenue for the third quarter was approximately $252 million, up 16% compared to the prior year period.

• Diluted earnings per share for the third quarter increased by approximately 29% to $0.94.

• Cyber Security revenue increased by approximately 29% in the third quarter, indicating strong growth potential in this segment.

• The company has increased visibility and confidence in achieving its full fiscal year 2025 financial objectives, leading to an updated fiscal year outlook.

Negative Points

• Revenue for the first nine months of fiscal year 2025 was down approximately 1% year over year, reflecting challenges in certain areas.

• Service Assurance revenue for the first nine months decreased by approximately 5%, indicating some struggles in this segment.

• The company experienced an unrealized loss on a foreign investment of approximately $0.07 per share in the third quarter.

• Service Provider customer vertical revenue decreased by 7.2% during the first nine months of fiscal year 2025.

• The company is still in the early stages of evaluating opportunities in the fixed wireless area, with no significant success reported yet.