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NetScout Reports Fiscal Q4, Full Year

WESTFORD, Mass., April 30, 2015 – NetScout Systems, Inc. (NASDAQ: NTCT), an industry leader for advanced network, application and service assurance solutions, today announced financial results for its fourth quarter and fiscal year ended March 31, 2015.

“NetScout completed its fiscal year 2015 with strong revenue growth of 14% that helped drive stellar non-GAAP EPS growth of 33%,” stated Anil Singhal, NetScout’s President and CEO. “Overall, we made notable progress this year as we innovated, successfully expanded our customer relationships worldwide, and delivered our third consecutive year of solid non-GAAP revenue growth with even stronger profitability growth. Just as important, we have set the stage for accelerating the Company’s ability to fully execute its strategy and better capitalize on a range of attractive growth opportunities worldwide through our previously announced plans to acquire Danaher’s Communications Business. We are particularly pleased with demand levels in our service provider segment, which enabled us to exceed our target of 20 percent growth for service provider product revenue for yet another year. We continued to make progress expanding our customer relationships although we experienced some delays in fourth-quarter purchasing by certain international customers primarily resulting from macroeconomic headwinds associated with the volatile foreign exchange environment that has developed over the past six months.”

Q4 and FY15 Financial Results
Total revenue for the fourth quarter of fiscal year 2015 was $119.4 million, a 6% increase over $112.3 million in the same period last year. Non-GAAP revenue for the fourth quarter of fiscal year 2015 also increased by 6%. A reconciliation of GAAP and non-GAAP results is included in the attached financial tables.

Total product revenue for the fourth quarter of fiscal year 2015 was $74.1 million, an increase of 5% from the same period last year. Service revenue of $45.3 million for the fourth quarter of fiscal year 2015 grew by 8% on a GAAP basis from the same period last year. Non-GAAP service revenue was $45.3 million for the fourth quarter of fiscal year 2015, an 8% increase over the same quarter in fiscal year 2014.

Income from operations was $30.6 million in the fourth quarter of fiscal year 2015, an increase of 18% from $26.0 million in the same quarter last year. Fourth-quarter fiscal year 2015 non-GAAP income from operations was $42.7 million, a 36% increase over the same quarter one year ago.

Net income for the fourth quarter of fiscal year 2015 was $20.9 million, or $0.50 per diluted share, compared with net income of $16.7 million, or $0.40 per diluted share in the fourth quarter one year ago. On a non-GAAP basis, net income for the fourth quarter was $27.9 million, or $0.67 per diluted share, versus non-GAAP net income of $20.2 million, or $0.48 per diluted share, in the fourth quarter of fiscal year 2014.

Other notable financial highlights for the fourth quarter and fiscal year 2015 included:

  • NetScout’s operating margin for the fourth quarter of fiscal year 2015 was 25.6%, compared with 23.1% one year ago and 22.7% on a sequential basis. NetScout’s non-GAAP operating margin for the fourth quarter of fiscal year 2015 was 35.8%, versus 27.9% a year ago and 31.6% on a sequential basis.
  • Fiscal year 2015 total revenue was $453.7 million, which represents 14% growth over fiscal year 2014 total revenue. On a non-GAAP basis, fiscal year 2015 total revenue of $453.7 million also increased by 14% over the prior fiscal year.
  • Fiscal year 2015 product revenue of $272.9 million increased by 16% over the prior fiscal year. For fiscal year 2015, service revenue was $180.8 million, which is 11% higher than fiscal year 2014’s service revenue. On a non-GAAP basis, service revenue of $180.8 million for fiscal year 2015 also grew by 11% over last year.
  • NetScout’s operating margin for fiscal year 2015 was 21.3%, compared with 19.7% one year ago. NetScout’s non-GAAP operating margin for fiscal year 2015 was 29.5%, versus 25.4% in fiscal year 2014.
  • Fiscal year 2015 net income was $61.2 million, or $1.47 per diluted share, compared with $49.1 million, or $1.17 per diluted share, in fiscal year 2014. Non-GAAP net income for fiscal year 2015 was $84.3 million, or $2.03 per diluted share, compared with $64.2 million, or $1.53 per diluted share, in fiscal year 2014.
  • As of March 31, 2015, cash and cash equivalents, and short and long-term marketable securities were $264.9 million, an increase of $24.2 million since the end of the third quarter and an increase of $46.1 million since the end of fiscal year 2014.

    NetScout Systems Inc. (Nasdaq: NTCT)

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