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2025-09-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the transition period from to

Commission file number 000-26251

NETSCOUT SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware |  | 04-2837575
(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification No.)

310 Littleton Road, Westford, MA 01886
(978) 614-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered:
Common Stock, $0.001 par value per share | NTCT | Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant's common stock, par value $0.001 per share, as of October 27, 2025 was 72,193,673.

Table of Contents
NETSCOUT SYSTEMS, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2025
TABLE OF CONTENTS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS | 1
PART I: FINANCIAL INFORMATION |
Item 1. | Unaudited Financial Statements: |
| Consolidated Balance Sheets: At September 30, 2025 and March 31, 2025 | 2
| Consolidated Statements of Operations: For the three and six months ended September 30, 2025 and 2024 | 3
| Consolidated Statements of Comprehensive Income (L oss): For the three and six months ended September 30, 2025 and 2024 | 4
| Consolidated Statements of Stockholders' Equity: For the three and six months ended September 30, 2025 and 2024 | 5
| Consolidated Statements of Cash Flows: For the six months ended September 30, 2025 and 2024 | 7
| Notes to Consolidated Financial Statements | 8
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41
Item 4. | Controls and Procedures | 41
PART II: OTHER INFORMATION |
Item 1. | Legal Proceedings | 42
Item 1A. | Risk Factors | 42
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43
Item 3. | Defaults Upon Senior Securities | 43
Item 4. | Mine Safety Disclosures | 43
Item 5. | Other Information | 44
Item 6. | Exhibits | 45
SIGNATURES |  | 46

Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to "NetScout," the "Company," "we," "us," and "our" refer to NetScout Systems, Inc. and, where appropriate, our consolidated subsidiaries.
NetScout, the NetScout logo, Adaptive Service Intelligence and other trademarks or service marks of NetScout appearing in this Quarterly Report are the property of NetScout Systems, Inc. and/or its subsidiaries and/or affiliates in the United States and/or other countries. Any third-party trade names, trademarks and service marks appearing in this Quarterly Report are the property of their respective holders.

Table of Contents
Cautionary Statement Concerning Forward-Looking Statements
The following discussion and other parts of this Quarterly Report contain forward-looking statements under Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. These forward-looking statements involve risks and uncertainties. Examples of forward-looking statements include statements that relate to future events or our future financial performance or liquidity, and other statements that are not historical fact. You can identify forward-looking statements by their use of forward-looking words such as "may," "will," "could," "should," "expects," "plans," "intends," "seeks," "anticipates," "believes," "estimates," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on these forward-looking statements. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for our fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on May 15, 2025, and elsewhere in this Quarterly Report. These factors may cause our actual results to differ materially from any forward-looking statement. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
1

Table of Contents
PART I: FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
NetScout Systems, Inc.
Consolidated Balance Sheets
(In thousands, except for per share data)

| September 30, 2025 |  | March 31, 2025
| (Unaudited) |  |
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 483,380 |  |  | $ | 457,415 |
Marketable securities and investments | 33,483 |  |  | 34,058 |
Accounts receivable and unbilled costs, net of allowance for credit losses of $98 and $214 a t September 30, 2025 and March 31, 2025, respectively | 130,158 |  |  | 163,654 |
Inventories and deferred costs | 12,381 |  |  | 12,891 |
Prepaid income taxes | 14,660 |  |  | 13,380 |
Prepaid expenses and other current assets | 33,969 |  |  | 31,786 |
Total current assets | 708,031 |  |  | 713,184 |
Fixed assets, net | 21,290 |  |  | 21,529 |
Operating lease right-of-use assets | 38,388 |  |  | 37,717 |
Goodwill | 1,069,517 |  |  | 1,076,383 |
Intangible assets, net | 238,389 |  |  | 258,690 |
Deferred income taxes | 78,845 |  |  | 66,294 |
Long-term marketable securities | 10,042 |  |  | 1,004 |
Other assets | 11,682 |  |  | 11,777 |
Total assets | $ | 2,176,184 |  |  | $ | 2,186,578 |
Liabilities and Stockholders' Equity |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 14,706 |  |  | $ | 18,208 |
Accrued compensation | 53,461 |  |  | 56,696 |
Accrued other | 21,601 |  |  | 19,397 |
Income taxes payable | 883 |  |  | 883 |
Deferred revenue and customer deposits | 276,768 |  |  | 301,753 |
Current portion of operating lease liabilities | 10,009 |  |  | 10,995 |
Total current liabilities | 377,428 |  |  | 407,932 |
Other long-term liabilities | 7,911 |  |  | 8,210 |
Deferred tax liability | 2,872 |  |  | 2,643 |
Accrued long-term retirement benefits | 29,571 |  |  | 27,379 |
Long-term deferred revenue and customer deposits | 151,311 |  |  | 147,510 |
Operating lease liabilities, net of current portion | 33,539 |  |  | 32,509 |
Total liabilities | 602,632 |  |  | 626,183 |
Commitments and contingencies (Note 13) |  |  |
Stockholders' equity: |  |  |
Preferred stock, $0.001 par value, 5,000,000 authorized; none issued and outstanding | — |  |  | — |
Common stock, $0.001 par value, 300,000,000 authorized; 136,324,349 and 134,038,262 issued and 72,186,052 and 72,060,237 outstanding | 136 |  |  | 134 |
Additional paid-in capital | 3,293,220 |  |  | 3,255,333 |
Accumulated other comprehensive income | 3,954 |  |  | 4,073 |
Treasury stock, at cost, 64,138,297 and 61,978,025 shares | (1,701,464) |  |  | (1,654,702) |
Accumulated deficit | (22,294) |  |  | (44,443) |
Total stockholders' equity | 1,573,552 |  |  | 1,560,395 |
Total liabilities and stockholders' equity | $ | 2,176,184 |  |  | $ | 2,186,578 |

The accompanying notes are an integral part of these consolidated financial statements.
2

Table of Contents
NetScout Systems, Inc.
Consolidated Statements of Operations
(In thousands, except for per share data)
(Unaudited)

| Three Months Ended |  | Six Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenue: |  |  |  |  |  |  |
Product | $ | 94,712 |  |  | $ | 81,033 |  |  | $ | 167,705 |  |  | $ | 142,202 |
Service | 124,305 |  |  | 110,075 |  |  | 238,059 |  |  | 223,471 |
Total revenue | 219,017 |  |  | 191,108 |  |  | 405,764 |  |  | 365,673 |
Cost of revenue: |  |  |  |  |  |  |
Product | 11,597 |  |  | 13,440 |  |  | 23,522 |  |  | 25,444 |
Service | 32,013 |  |  | 28,617 |  |  | 63,510 |  |  | 60,982 |
Total cost of revenue | 43,610 |  |  | 42,057 |  |  | 87,032 |  |  | 86,426 |
Gross profit | 175,407 |  |  | 149,051 |  |  | 318,732 |  |  | 279,247 |
Operating expenses: |  |  |  |  |  |  |
Research and development | 40,269 |  |  | 35,909 |  |  | 80,058 |  |  | 78,374 |
Sales and marketing | 64,925 |  |  | 61,226 |  |  | 135,520 |  |  | 131,556 |
General and administrative | 26,261 |  |  | 23,742 |  |  | 54,118 |  |  | 49,323 |
Amortization of acquired intangible assets | 11,162 |  |  | 11,642 |  |  | 22,281 |  |  | 23,256 |
Restructuring charges | 304 |  |  | 2,409 |  |  | 833 |  |  | 18,972 |
Goodwill impairment | — |  |  | — |  |  | — |  |  | 426,967 |
Total operating expenses | 142,921 |  |  | 134,928 |  |  | 292,810 |  |  | 728,448 |
Income (loss) from operations | 32,486 |  |  | 14,123 |  |  | 25,922 |  |  | (449,201) |
Interest and other income (expense), net: |  |  |  |  |  |  |
Interest income | 3,530 |  |  | 2,546 |  |  | 6,741 |  |  | 5,644 |
Interest expense | (421) |  |  | (1,801) |  |  | (836) |  |  | (3,746) |
Other (expense) income, net | (4,213) |  |  | (2,542) |  |  | (3,273) |  |  | 5,933 |
Total interest and other income (expense), net | (1,104) |  |  | (1,797) |  |  | 2,632 |  |  | 7,831 |
Income (loss) before income tax expense (benefit) | 31,382 |  |  | 12,326 |  |  | 28,554 |  |  | (441,370) |
Income tax expense (benefit) | 5,554 |  |  | 3,299 |  |  | 6,405 |  |  | (7,021) |
Net income (loss) | $ | 25,828 |  |  | $ | 9,027 |  |  | $ | 22,149 |  |  | $ | (434,349) |
Basic net income (loss) per share | $ | 0.36 |  |  | $ | 0.13 |  |  | $ | 0.31 |  |  | $ | (6.08) |
Diluted net income (loss) per share | $ | 0.35 |  |  | $ | 0.13 |  |  | $ | 0.30 |  |  | $ | (6.08) |
Weighted average common shares outstanding used in computing: |  |  |  |  |  |  |
Net income (loss) per share - basic | 72,077 |  |  | 71,447 |  |  | 71,904 |  |  | 71,457 |
Net income (loss) per share - diluted | 72,917 |  |  | 71,837 |  |  | 73,130 |  |  | 71,457 |

The accompanying notes are an integral part of these consolidated financial statements.
3

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NetScout Systems, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)

| Three Months Ended |  | Six Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net income (loss) | $ | 25,828 |  |  | $ | 9,027 |  |  | $ | 22,149 |  |  | $ | (434,349) |
Other comprehensive income (loss): |  |  |  |  |  |  |
Cumulative translation adjustments | (147) |  |  | 528 |  |  | (4) |  |  | 397 |
Changes in market value of investments: |  |  |  |  |  |  |
Changes in unrealized gains, net of taxes of $0, $8, $4 and $10 respectively | 14 |  |  | 21 |  |  | 13 |  |  | 28 |
Total net change in market value of investments | 14 |  |  | 21 |  |  | 13 |  |  | 28 |
Changes in market value of derivatives: |  |  |  |  |  |  |
Changes in market value of derivatives, net of taxes of ($43), $66, $34 and $38, respectively | (139) |  |  | 209 |  |  | 114 |  |  | 121 |
Reclassification adjustment for net (losses) gains included in net income (loss), net of (benefits) taxes of ($35), ($4), ($75) and $11 respectively | (111) |  |  | (11) |  |  | (242) |  |  | 33 |
Total net change in market value of derivatives | (250) |  |  | 198 |  |  | (128) |  |  | 154 |
Other comprehensive (loss) income | (383) |  |  | 747 |  |  | (119) |  |  | 579 |
Comprehensive income (loss) | $ | 25,445 |  |  | $ | 9,774 |  |  | $ | 22,030 |  |  | $ | (433,770) |

The accompanying notes are an integral part of these consolidated financial statements.
4

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NetScout Systems, Inc.
Consolidated Statements of Stockholders' Equity
(In thousands, except for per share data)
(Unaudited)

| Three months ended September 30, 2025
| Common Stock Voting |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Accumulated Deficit |  | Total Stockholders' Equity
| Shares |  | Par Value |  |  |  | Shares |  | Stated Value |  |
Balance, June 30, 2025 | 135,857,091 |  |  | $ | 135 |  |  | $ | 3,274,682 |  |  | $ | 4,337 |  |  | 63,336,389 |  |  | $ | (1,683,481) |  |  | $ | (48,122) |  |  | $ | 1,547,551 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  | 25,828 |  |  | 25,828 |
Unrealized net investment gains |  |  |  |  |  |  | 14 |  |  |  |  |  |  |  |  | 14 |
Unrealized net losses on derivative financial instruments |  |  |  |  |  |  | (250) |  |  |  |  |  |  |  |  | (250) |
Cumulative translation adjustments |  |  |  |  |  |  | (147) |  |  |  |  |  |  |  |  | (147) |
Issuance of common stock pursuant to vesting of restricted stock units | 250,801 |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |  | 1 |
Stock-based compensation expense for restricted stock units granted to employees |  |  |  |  | 13,150 |  |  |  |  |  |  |  |  |  |  | 13,150 |
Issuance of common stock under employee stock purchase plan | 216,457 |  |  |  |  | 5,388 |  |  |  |  |  |  |  |  |  |  | 5,388 |
Repurchase of treasury stock |  |  |  |  |  |  |  |  | 801,908 |  |  | (17,983) |  |  |  |  | (17,983) |
Balance, September 30, 2025 | 136,324,349 |  | $ | 136 |  |  | $ | 3,293,220 |  |  | $ | 3,954 |  |  | 64,138,297 |  | $ | (1,701,464) |  |  | $ | (22,294) |  |  | $ | 1,573,552 |

| Six months ended September 30, 2025
| Common Stock Voting |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Accumulated Deficit |  | Total Stockholders' Equity
| Shares |  | Par Value |  |  |  | Shares |  | Stated Value |  |
Balance, March 31, 2025 | 134,038,262 |  |  | $ | 134 |  |  | $ | 3,255,333 |  |  | $ | 4,073 |  |  | 61,978,025 |  |  | $ | (1,654,702) |  |  | $ | (44,443) |  |  | $ | 1,560,395 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  | 22,149 |  |  | 22,149 |
Unrealized net investment gains |  |  |  |  |  |  | 13 |  |  |  |  |  |  |  |  | 13 |
Unrealized net losses on derivative financial instruments |  |  |  |  |  |  | (128) |  |  |  |  |  |  |  |  | (128) |
Cumulative translation adjustments |  |  |  |  |  |  | (4) |  |  |  |  |  |  |  |  | (4) |
Issuance of common stock pursuant to vesting of restricted stock units | 2,069,630 |  |  | 2 |  |  |  |  |  |  |  |  |  |  |  |  | 2 |
Stock-based compensation expense for restricted stock units granted to employees |  |  |  |  | 32,499 |  |  |  |  |  |  |  |  |  |  | 32,499 |
Issuance of common stock under employee stock purchase plan | 216,457 |  |  |  |  | 5,388 |  |  |  |  |  |  |  |  |  |  | 5,388 |
Repurchase of treasury stock |  |  |  |  |  |  |  |  | 2,160,272 |  |  | (46,762) |  |  |  |  | (46,762) |
Balance, September 30, 2025 | 136,324,349 |  | $ | 136 |  |  | $ | 3,293,220 |  |  | $ | 3,954 |  |  | 64,138,297 |  | $ | (1,701,464) |  |  | $ | (22,294) |  |  | $ | 1,573,552 |

The accompanying notes are an integral part of these consolidated financial statements.
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NetScout Systems, Inc.
Consolidated Statements of Stockholders' Equity
(In thousands, except for per share data)
(Unaudited)

| Three months ended September 30, 2024
| Common Stock Voting |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Accumulated Deficit |  | Total Stockholders' Equity
| Shares |  | Par Value |  |  |  | Shares |  | Stated Value |  |
Balance, June 30, 2024 | 133,189,228 |  |  | $ | 133 |  |  | $ | 3,201,998 |  |  | $ | 3,404 |  |  | 61,877,819 |  |  | $ | (1,652,642) |  |  | $ | (120,897) |  |  | $ | 1,431,996 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  | 9,027 |  |  | 9,027 |
Unrealized net investment gains |  |  |  |  |  |  | 21 |  |  |  |  |  |  |  |  | 21 |
Unrealized net gains on derivative financial instruments |  |  |  |  |  |  | 198 |  |  |  |  |  |  |  |  | 198 |
Cumulative translation adjustments |  |  |  |  |  |  | 528 |  |  |  |  |  |  |  |  | 528 |
Issuance of common stock pursuant to vesting of restricted stock units | 269,164 |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  | — |
Stock-based compensation expense for restricted stock units granted to employees |  |  |  |  | 14,638 |  |  |  |  |  |  |  |  |  |  | 14,638 |
Issuance of common stock under employee stock purchase plan | 213,098 |  |  |  |  | 4,577 |  |  |  |  |  |  |  |  |  |  | 4,577 |
Repurchase of treasury stock |  |  |  |  |  |  |  |  |  | 78,442 |  |  | (1,597) |  |  |  |  | (1,597) |
Balance, September 30, 2024 | 133,671,490 |  | $ | 133 |  |  | $ | 3,221,213 |  |  | $ | 4,151 |  |  | 61,956,261 |  | $ | (1,654,239) |  |  | $ | (111,870) |  |  | $ | 1,459,388 |

| Six months ended September 30, 2024
| Common Stock Voting |  | Additional Paid In Capital |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Retained Earnings (Accumulated Deficit) |  | Total Stockholders' Equity
| Shares |  | Par Value |  |  |  | Shares |  | Stated Value |  |
Balance, March 31, 2024 | 131,316,309 |  |  | $ | 131 |  |  | $ | 3,181,366 |  |  | $ | 3,572 |  |  | 59,912,093 |  |  | (1,615,483) |  |  | $ | 322,479 |  |  | $ | 1,892,065 |
Net loss |  |  |  |  |  |  |  |  |  |  |  |  | (434,349) |  |  | (434,349) |
Unrealized net investment gains |  |  |  |  |  |  | 28 |  |  |  |  |  |  |  |  | 28 |
Unrealized net gains on derivative financial instruments |  |  |  |  |  |  | 154 |  |  |  |  |  |  |  |  | 154 |
Cumulative translation adjustments |  |  |  |  |  |  | 397 |  |  |  |  |  |  |  |  | 397 |
Issuance of common stock pursuant to vesting of restricted stock units | 2,142,083 |  |  | 2 |  |  |  |  |  |  |  |  |  |  |  |  | 2 |
Stock-based compensation expense for restricted stock units granted to employees |  |  |  |  | 35,270 |  |  |  |  |  |  |  |  |  |  | 35,270 |
Issuance of common stock under employee stock purchase plan | 213,098 |  |  |  |  | 4,577 |  |  |  |  |  |  |  |  |  |  | 4,577 |
Repurchase of treasury stock |  |  |  |  |  |  |  |  |  | 2,044,168 |  |  | (38,756) |  |  |  |  | (38,756) |
Balance, September 30, 2024 | 133,671,490 |  | $ | 133 |  |  | $ | 3,221,213 |  |  | $ | 4,151 |  |  | 61,956,261 |  | $ | (1,654,239) |  |  | $ | (111,870) |  |  | $ | 1,459,388 |

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NetScout Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

| Six Months Ended
| September 30,
| 2025 |  | 2024
Cash flows from operating activities: |  |  |
Net income (loss) | $ | 22,149 |  |  | $ | (434,349) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: |  |  |
Depreciation and amortization | 28,811 |  |  | 32,505 |
Operating lease right-of-use asset amortization | 5,004 |  |  | 5,227 |
Loss on disposal of fixed assets | 5 |  |  | 15 |
Share-based compensation expense | 33,516 |  |  | 36,084 |
Goodwill impairment | — |  |  | 426,967 |
Deferred income taxes | (12,514) |  |  | (24,819) |
Loss (gain) in equity investment | 1,008 |  |  | (7,633) |
Changes in assets and liabilities |  |  |
Accounts receivable and unbilled costs | 33,838 |  |  | 73,697 |
Inventories and deferred costs | 32 |  |  | (3,213) |
Prepaid expenses and other assets | (3,505) |  |  | (4,697) |
Accounts payable | (3,455) |  |  | (516) |
Accrued compensation and other expenses | 2,084 |  |  | (6,264) |
Operating lease liabilities | (5,626) |  |  | (5,915) |
Income taxes payable | 558 |  |  | 194 |
Deferred revenue | (21,699) |  |  | (52,584) |
Net cash provided by operating activities | 80,206 |  |  | 34,699 |
Cash flows from investing activities: |  |  |
Purchase of marketable securities and investments | (50,589) |  |  | (20,999) |
Proceeds from sales and maturity of marketable securities | 30,362 |  |  | 25,290 |
Proceeds from sale of equity investment | 11,772 |  |  | — |
Purchase of fixed assets | (4,111) |  |  | (2,150) |
Purchase of intangible assets | — |  |  | (1,290) |
Net cash (used in) provided by investing activities | (12,566) |  |  | 851 |
Cash flows from financing activities: |  |  |
Issuance of common stock under stock plans | 2 |  |  | 2 |
Treasury stock repurchases | (31,565) |  |  | (25,257) |
Tax withholding on restricted stock units | (15,197) |  |  | (13,499) |
Repayment of long-term debt | — |  |  | (25,000) |
Net cash used in financing activities | (46,760) |  |  | (63,754) |
Effect of exchange rate changes on cash and cash equivalents | 5,085 |  |  | 1,885 |
Net increase (decrease) in cash and cash equivalents | 25,965 |  |  | (26,319) |
Cash and cash equivalents, beginning of period | 457,415 |  |  | 389,674 |
Cash and cash equivalents, end of period | $ | 483,380 |  |  | $ | 363,355 |
Supplemental disclosures: |  |  |
Cash paid for interest | $ | — |  |  | $ | 2,693 |
Cash paid for income taxes | $ | 20,047 |  |  | $ | 22,176 |
Non-cash transactions: |  |  |
Transfers of inventory to fixed assets | $ | 613 |  |  | $ | 1,020 |
Additions to property, plant and equipment included in accounts payable | $ | 68 |  |  | $ | 86 |
Issuance of common stock under employee stock plans | $ | 5,388 |  |  | $ | 4,577 |

The accompanying notes are an integral part of these consolidated financial statements.
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NetScout Systems, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc. (NetScout or the Company). Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position and stockholders' equity, results of operations and cash flows. The year-end consolidated balance sheet data and statement of stockholders' equity were derived from the Company's audited financial statements, but do not include all disclosures required by GAAP. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation.
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 filed with the SEC on May 15, 2025.
Global and Macroeconomic Conditions
The Company continues to closely monitor the current global and macroeconomic conditions, including the impacts of the ongoing war in Ukraine and hostilities in the Middle East, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, international trade relations (including trade protection measures, such as tariffs and other trade barriers), impacts associated with the U.S. Government shutdown, and the risk of a recession, including the manner and extent to which they have impacted and could continue to impact its business, customers, employees, supply chain, and distribution network. The full extent of the impacts of these global and macroeconomic trends remain uncertain. It is possible that the measures taken by the governments of countries affected and the resulting economic impacts may materially and adversely affect the Company's future results of operations, cash flows and financial position, as well as its customers.
The Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. The Company remains optimistic but cognizant of ongoing macroeconomic uncertainty and constrained customer spending in the service provider market and remains firmly focused on driving product innovation, returning to annual revenue growth, and enhancing margins through continued disciplined cost management as it navigates the current macroeconomic landscape that may persist through fiscal year 2026. In addition to its cash, cash equivalents, marketable securities, and investments, based on covenant levels, as of September 30, 2025, the Company had $600 million available under a revolving credit facility.
The Company expects net cash provided by operations combined with cash, cash equivalents, marketable securities and investments and borrowing availability under the revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization that are included on the face of the statements of income. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 is effective for the Company beginning with its fiscal year ending March 31, 2028. The Company is in the process of evaluating the impact that the adoption of ASU 2024-03 will have on its disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and usefulness of income tax disclosures for decision-making. The amendments address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. The amendments are effective for annual periods beginning after December
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15, 2024. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements and disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, "Revenue from Contracts with Customers." The practical expedient allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for the annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. ASU 2025-05 should be applied on a prospective basis with early adoption permitted. The Company is currently evaluating the impact of this standard and does not expect the adoption of 2025-05 to have a material impact on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles (Subtopic 350-40): Update to modernize the accounting for internal-use software costs. ASU 2025-06 removes all references to software project development stages and clarifies the recognition threshold, entities must meet to begin capitalizing costs. ASU 2025-06 is effective for the Company beginning with its fiscal year ending March 31, 2029. The Company is currently evaluating the impact of this standard and does not expect the adoption of ASU 2025-06 to have a material impact on its consolidated financial statements and disclosures.
NOTE 2 – REVENUE
Revenue Recognition Policy
The Company exercises judgment and uses estimates in connection with determining the amounts of product and service revenues to be recognized in each accounting period.
The Company derives revenues primarily from the sale of network management tools and cybersecurity solutions for service provider and enterprise customers, which include hardware, software, and service offerings. The Company's product sales consist primarily of software-only offerings and offerings that include hardware appliances with embedded software each of which are essential to providing customers the intended functionality of the solutions.
The Company accounts for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by the Company as an arrangement with commercial substance identifying payment terms, each party's rights and obligations regarding the products or services to be transferred and the amount the Company deems probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services.
Product revenue is typically recognized upon fulfillment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software, and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. The Company's service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, subscription-based services, stand-ready software-as-a-service (SAAS) and other professional services including consulting and training. The Company generally provides software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training.
Generally, the Company's contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts.
Bundled arrangements are concurrent customer purchases of a combination of the Company's product and service offerings that may be delivered at various points in time. The Company allocates the transaction price among the performance
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obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP for each of the products and services sold, based primarily on the performance obligation's historical pricing. The Company also considers its overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, the Company has established SSP for a majority of its service performance obligations based on historical standalone sales. In certain instances, the Company has established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. SSP has primarily been established for product performance obligations as the average or median selling price for which the performance obligation was recently sold, whether sold alone or sold as part of a bundle transaction. The Company reviews sales of the product performance obligations on a quarterly basis and updates, when appropriate, its SSP for such performance obligations to ensure that it reflects recent pricing experience.
The Company's products are distributed through its direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. The Company records consideration given to a customer as a reduction of revenue to the extent they have recorded revenue from the customer. With limited exceptions, the Company's return policy does not allow product returns for a refund. Returns have been insignificant to date. In addition, the Company has a history of successfully collecting receivables from its resellers and distributors.
During the six months ended September 30, 2025, the Company recognized revenue of $185.1 million related to the Company's deferred revenue balance reported at March 31, 2025.
Performance Obligations
Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. The transaction price is allocated among performance obligations in bundled contracts in an amount that depicts the relative standalone selling prices of each obligation.
For contracts involving distinct hardware and software licenses, the performance obligations are satisfied at a point in time when control is transferred to the customer. For standalone maintenance and post-contract support (PCS), the performance obligation is satisfied ratably over the contract term as a stand-ready obligation. For consulting and training services, the performance obligation may be satisfied over the contract term as a stand-ready obligation, satisfied over a period of time as those services are delivered, satisfied at the completion of the service when control has transferred, or the services have expired unused.
Payments for hardware, software licenses, one-year maintenance, PCS and consulting services, are typically due up front with payment terms of 30 to 90 days. However, the Company does have contracts pursuant to which billings occur ratably over a period of years following the transfer of control for the contracted performance obligations. Payments on multi-year maintenance, PCS and consulting services are typically due in annual installments over the contract term. The Company did not have any material variable consideration such as obligations for returns, refunds or warranties at September 30, 2025.
At September 30, 2025, the Company had total deferred revenue and customer deposits of $428.1 million, which represents the aggregate total contract price allocated to undelivered performance obligations. The Company expects to recognize $276.8 million, or 65%, of this revenue during the next 12 months and expects to recognize the remaining $151.3 million, or 35%, of this revenue thereafter.
In accordance with our revenue recognition policies, there are circumstances for which the Company does not recognize revenue relating to sales transactions that have been billed and the related invoiced amount has not been collected. While the invoiced amount represents an enforceable obligation, the Company does not believe its right to payment is unconditional. Therefore, for balance sheet presentation purposes, the Company has not recognized the deferred revenue or the related account receivable, and no amounts appear in the consolidated balance sheets for such transactions because control of the underlying deliverable has not transferred. The aggregate amount of unrecognized accounts receivable and deferred revenue was $2.0 million and $5.5 million at September 30, 2025 and March 31, 2025, respectively.
The Company expects that the amount of billed and unbilled deferred revenue will change from quarter to quarter for several reasons, including the specific timing, duration and size of large customer support and service agreements, varying billing cycles of such agreements, the specific timing of customer renewals, and foreign currency fluctuations. The Company did not have material significant financing components, or variable consideration or performance obligations satisfied in a prior period recognized during the six months ended September 30, 2025.
Contract Balances
The Company may receive payments from customers based on billing schedules as established by the Company's contracts. Contract assets relate to performance obligations where control has transferred to the customer in advance of
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scheduled billings. The Company records unbilled accounts receivable representing the right to consideration in exchange for goods or services that have been transferred to a customer conditional on the passage of time. Deferred revenue relates to scenarios where billings with an unconditional right to payment occur before all performance obligations are delivered or payments are received in advance of performance under the contract.
Costs to Obtain Contracts
The Company has determined that the only significant incremental costs incurred to obtain contracts with customers within the scope of ASC Topic 606, Revenue from contracts with customers, are sales commissions paid to its employees. Sales commissions are recorded as an asset and amortized to expense ratably over the remaining performance periods of the related contracts with remaining performance obligations. The Company expenses costs as incurred for sales commissions when the amortization period would have been one year or less.
At September 30, 2025, the consolidated balance sheet included $9.5 million in assets related to sales commissions to be expensed in future periods. A balance of $5.4 million was included in prepaid expenses and other current assets, and a balance of $4.1 million was included in other assets in the Company's consolidated balance sheet at September 30, 2025. At March 31, 2025, the consolidated balance sheet included $9.9 million in assets related to sales commissions to be expensed in future periods. A balance of $5.4 million was included in prepaid expenses and other current assets, and a balance of $4.5 million was included in other assets in the Company's consolidated balance sheet at March 31, 2025.
During each of the three and six months ended September 30, 2025 and 2024, the Company recognized $1.8 million, $1.7 million, $3.7 million and $3.4 million of amortization related to this sales commission asset, respectively, which is included in the sales and marketing expense line in the Company's consolidated statements of operations.
Allowance for Credit Losses
The Company continually monitors collections from its customers. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for credit losses based on a combination of factors, including but not limited to, analysis of the aging schedules, past due balances, historical collection experience and prevailing economic conditions.
The following table summarizes the activity in the allowance for credit losses (in thousands):

Balance at March 31, 2025 | $ | 214 |
Additions resulting in charges to operations | 89 |
Recoveries of previously reserved balances | (40) |
Deductions due to write-offs | (165) |
Balance at September 30, 2025 | $ | 98 |

NOTE 3 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings.
At September 30, 2025, two channel partners who primarily serve U.S. Government agencies accounted for more than 10% of the accounts receivable balance each, while no direct customers accounted for more than 10% of the accounts receivable balance. At March 31, 2025, the Company had no direct customers or channel partners which accounted for more than 10% of the accounts receivable balance.
During the three months ended September 30, 2025, one channel partner who primarily serves U.S. Government agencies accounted for more than 10% of the Company's total revenue, while no direct customers accounted for more than 10% of total revenue. During the six months ended September 30, 2025, the Company had no direct customers or channel partners that accounted for more than 10% of total revenue. During the three and six months ended September 30, 2024 , the Company had no direct customers or channel partners accounted for more than 10% of total revenue.
Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations, nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company's assumptions are incorrect, there could be an adverse impact on its allowance for credit losses.
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NOTE 4 – SHARE-BASED COMPENSATION
Equity Incentive Plan – On September 12, 2019, the Company's stockholders approved the Company's 2019 Equity Incentive Plan (2019 Plan), which replaced the Company's 2007 Equity Incentive Plan, as amended. The 2019 Plan permits the granting of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards, collectively referred to as "share-based awards". The 2019 Plan has been amended from time to time to increase the number of shares reserved for issuance and to modify certain other terms.
On September 10, 2025, the Company's stockholders approved an amendment and restatement of the 2019 Amended Plan (Amended 2019 Plan) to further increase the number of shares reserved for issuance by 3,500,000 from 27,794,651 shares to 31,294,651 shares. As of September 30, 2025, an aggregate of 8,223,224 shares remained available for grant under the Amended 2019 Plan.
Periodically, the Company grants share-based awards to employees, executive officers, and directors of the Company and its subsidiaries. Additionally, the Company periodically grants performance-based restricted stock units to certain executive officers that cliff vest up to 100% of shares granted at target based upon achievement of the Company's established metrics pertaining to total shareholder return as compared to the Russell 2000 Index over a three-year period. The performance-based restricted stock units are valued at the time of grant using the Monte Carlo Simulation model. The measurement and recognition of stock compensation expense is based on estimated fair values for all share-based awards made to its employees, executive officers, and directors. Share-based awards are generally measured at fair value on the date of grant based on the number of shares granted and the quoted closing price of the Company's common stock. Such value is recognized on a straight-line basis as a cost of revenue or an operating expense over the corresponding vesting period.
Employee Stock Purchase Plan – The Company maintains the 2011 Amended and Restated Employee Stock Purchase Plan (ESPP) for all eligible employees as described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025. Under the ESPP, shares of the Company's common stock may be purchased on the last trading day of each bi-annual offering period at 85% of the fair market value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the six months ended September 30, 2025, employees purchased 216,457 shares under the ESPP and the fair market value per share was $24.89.
The following is a summary of share-based compensation expense including restricted stock units and performance-based restricted stock units granted pursuant to the Company's Amended 2019 Plan, and employee stock purchases made under the ESPP, based on estimated fair values within the applicable cost and expense lines identified below (in thousands):

| Three Months Ended |  | Six Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of product revenue | $ | 297 |  |  | $ | 295 |  |  | $ | 710 |  |  | $ | 726 |
Cost of service revenue | 1,930 |  |  | 1,905 |  |  | 4,677 |  |  | 4,794 |
Research and development | 3,990 |  |  | 3,934 |  |  | 9,522 |  |  | 9,820 |
Sales and marketing | 4,672 |  |  | 5,275 |  |  | 11,562 |  |  | 12,779 |
General and administrative | 2,668 |  |  | 3,477 |  |  | 7,045 |  |  | 7,965 |
| $ | 13,557 |  |  | $ | 14,886 |  |  | $ | 33,516 |  |  | $ | 36,084 |

NOTE 5 – CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES AND INVESTMENTS
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equi valents mainly consisted of U.S. government and municipal obligations, commercial paper, agency bonds, money market instruments and cash maintained with various financial institutions at September 30, 2025 and March 31, 2025.
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Marketable Securities
The following is a summary of marketable securities held by the Company at September 30, 2025, classified as short-term and long-term (in thousands):

| Amortized Cost |  | Unrealized Gains |  | Fair Value
Type of security: |  |  |  |  |
U.S. government and municipal obligations | $ | 7,982 |  |  | $ | 4 |  |  | $ | 7,986 |
Commercial paper | 18,991 |  |  | — |  |  | 18,991 |
Corporate bonds | 995 |  |  | 1 |  |  | 996 |
Certificates of deposit | 3,543 |  |  | — |  |  | 3,543 |
Agency bonds | 1,964 |  |  | 3 |  |  | 1,967 |
Total short-term marketable securities | 33,475 |  |  | 8 |  |  | 33,483 |
U.S. government and municipal obligations | 2,007 |  |  | 3 |  |  | 2,010 |
Agency bonds | 8,026 |  |  | 6 |  |  | $ | 8,032 |
Total long-term marketable securities | 10,033 |  |  | 9 |  |  | 10,042 |
Total marketable securities | $ | 43,508 |  |  | $ | 17 |  |  | $ | 43,525 |

The following is a summary of marketable securities held by the Company at March 31, 2025, classified as short-term and long-term (in thousands):

| Amortized Cost |  | Unrealized Gains (Losses) |  | Fair Value
Type of security: |  |  |  |  |
U.S. government and municipal obligations | $ | 4,413 |  |  | $ | 1 |  |  | $ | 4,414 |
Commercial paper | 17,358 |  |  | — |  |  | 17,358 |
Certificates of deposit | 505 |  |  | — |  |  | 505 |
Total short-term marketable securities | 22,276 |  |  | 1 |  |  | 22,277 |
U.S. government and municipal obligations | 1,005 |  |  | (1) |  |  | 1,004 |
Total long-term marketable securities | 1,005 |  |  | (1) |  |  | 1,004 |
Total marketable securities | $ | 23,281 |  |  | $ | — |  |  | $ | 23,281 |

Contractual maturities of the Company's marketable securities held at September 30, 2025 and March 31, 2025 were as follows (in thousands):

| September 30, 2025 |  | March 31, 2025
Available-for-sale securities: |  |  |
Due in 1 year or less | $ | 33,483 |  |  | $ | 22,277 |
Due after 1 year through 5 years | 10,042 |  |  | 1,004 |
| $ | 43,525 |  |  | $ | 23,281 |

Investments
In February 2023, the Company entered into a forward share purchase agreement with Napatech A/S (Napatech), a publicly traded Danish company registered on the Oslo stock exchange, to purchase approximately 6.2 million shares of Napatech's common stock for $7.5 million. In April 2023, the Company settled the forward share purchase contract with Napatech in exchange for approximately 6.2 million shares of Napatech's common stock. The Company accounted for the investment under the equity method and elected to apply the fair value option to the investment. The Company recorded the investment at fair value at the end of each period based on the closing price of Napatech's stock and any change in fair value during the period is recorded in other (expense) income, net within the Company's consolidated statement of operations. On August 4, 2025, the Company sold its entire equity investment in Napatech, receiving cash proceeds of $11.8 million. During the six months ended September 30, 2025 and 2024, the Company recognized a $1.0 million loss and a $7.6 million gain, respectively, on the Napatech equity investment, in other (expense) income, net. For the six months ended September 30, 2024, the unrealized gain related to foreign currency translation on the equity investment in Napatech was $0.7 million.
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NOTE 6 – FAIR VALUE MEASUREMENTS
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2025 and March 31, 2025 (in thousands):

| Fair Value Measurements at
| September 30, 2025
| Level 1 |  | Level 2 |  | Level 3 |  | Total
ASSETS: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 444,681 |  |  | $ | 38,699 |  |  | $ | — |  |  | $ | 483,380 |
U.S. government and municipal obligations | 9,996 |  |  | — |  |  | — |  |  | 9,996 |
Commercial paper | — |  |  | 18,991 |  |  | — |  |  | 18,991 |
Corporate bonds |  |  | 996 |  |  | — |  |  | 996 |
Certificates of deposit | — |  |  | 3,543 |  |  | — |  |  | 3,543 |
Derivative financial instruments |  |  | 91 |  |  | — |  |  | 91 |
Agency bonds |  |  | 9,999 |  |  | — |  |  | 9,999 |
| $ | 454,677 |  |  | $ | 72,319 |  |  | $ | — |  |  | $ | 526,996 |
LIABILITIES: |  |  |  |  |  |  |
Derivative financial instruments | $ | — |  |  | $ | (137) |  |  | $ | — |  |  | $ | (137) |
| $ | — |  |  | $ | (137) |  |  | $ | — |  |  | $ | (137) |

| Fair Value Measurements at
| March 31, 2025
| Level 1 |  | Level 2 |  | Level 3 |  | Total
ASSETS: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 434,121 |  |  | $ | 23,294 |  |  | $ | — |  |  | $ | 457,415 |
U.S. government and municipal obligations | 3,008 |  |  | 2,410 |  |  | — |  |  | 5,418 |
Commercial paper | — |  |  | 17,358 |  |  | — |  |  | 17,358 |
Certificates of deposit | — |  |  | 505 |  |  | — |  |  | 505 |
Equity investment in Napatech | 11,781 |  |  | — |  |  | — |  |  | 11,781 |
Derivative financial instruments | — |  |  | 197 |  |  | — |  |  | 197 |
| $ | 448,910 |  |  | $ | 43,764 |  |  | $ | — |  |  | $ | 492,674 |
LIABILITIES: |  |  |  |  |  |  |
Derivative financial instruments | $ | — |  |  | $ | (55) |  |  | $ | — |  |  | $ | (55) |
| $ | — |  |  | $ | (55) |  |  | $ | — |  |  | $ | (55) |

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments.
The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency.
The Company's Level 2 investments are classified as such because they are valued using observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets in markets that are not active.
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NOTE 7 – INVENTORIES AND DEFERRED COSTS
Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands):

| September 30, 2025 |  | March 31, 2025
Raw materials | $ | 5,616 |  |  | $ | 7,172 |
Work in process | 40 |  |  | 47 |
Finished goods | 4,271 |  |  | 3,890 |
Deferred costs | 2,454 |  |  | 1,782 |
| $ | 12,381 |  |  | $ | 12,891 |

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS
Goodwill
During the first quarter of fiscal year 2025, due to a decrease in the Company's stock price and overall market capitalization, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, it was determined a Triggering Event occurred, indicating goodwill may be impaired. Accordingly, the Company conducted an interim quantitative impairment test of its goodwill at June 30, 2024 using the market approach to estimate the fair value of its reporting unit. As a result of that interim impairment test, the Company recorded a $427.0 million goodwill impairment charge during the three months ended June 30, 2024. At September 30, 2024, the
Company performed a Triggering Event assessment and concluded no event or circumstances occurred that indicated goodwill was further impaired.
During fiscal year 2025, the Company completed its annual goodwill impairment test at January 31, 2025, using the qualitative assessment, and the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying value.
The Company may be required to record additional goodwill impairment charges. While management cannot predict if or when additional goodwill impairments may occur, future goodwill impairments could have material adverse effects on the Company's results of operations and financial condition.
At September 30, 2025 and March 31, 2025, the carrying amounts of goodwill were approximately $1.1 billion, respectively.
The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2025 as follows (in thousands):

Balance at March 31, 2025 | $ | 1,076,383 |
Foreign currency translation impact | (6,866) |
Balance at September 30, 2025 | $ | 1,069,517 |

Intangible Assets
The net carrying amounts of intangible asse t s were $238.4 million and $258.7 million at September 30, 2025 and March 31, 2025, respectively. Intangible assets acquired in a business co mbination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives.
The Company reviews definite-lived intangible assets for impairment when an event occurs that may indicate potential impairment. In connection with the interim goodwill impairment analysis performed during fiscal year 2025, the Company conducted an impairment test of its definite-lived intangible assets. Based on that assessment, the Company concluded that the carrying values of the Company's definite-lived intangible assets were recoverable. At March 31, 2025, the Company performed a Triggering Event assessment and concluded no events or circumstances occurred that indicated intangible assets may be impaired. However, if future events occur or if business conditions deteriorate, the Company may be required to record an impairment loss, and or accelerate the amortization of definite-live intangible assets in the future, which could be material to its results of operations and financial condition.
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Intangible assets include the foll owing amortizable intangible assets at September 30, 2025 (in thousands):

| Cost |  | Accumulated Amortization |  | Net
Developed technology | $ | 250,453 |  |  | $ | (245,614) |  |  | $ | 4,839 |
Customer relationships | 771,304 |  |  | (544,683) |  |  | 226,621 |
Distributor relationships and technology licenses | 5,233 |  |  | (4,319) |  |  | 914 |
Definite-lived trademark and trade name | 58,022 |  |  | (52,163) |  |  | 5,859 |
Core technology | 7,192 |  |  | (7,192) |  |  | — |
Capitalized software | 3,317 |  |  | (3,317) |  |  | — |
Other | 1,208 |  |  | (1,052) |  |  | 156 |
| $ | 1,096,729 |  |  | $ | (858,340) |  |  | $ | 238,389 |

Intangible assets include the following amortizable intangible assets at March 31, 2025 (in thousands):

| Cost |  | Accumulated Amortization |  | Net
Developed technology | $ | 248,232 |  |  | $ | (242,298) |  |  | $ | 5,934 |
Customer relationships | 763,397 |  |  | (518,995) |  |  | 244,402 |
Distributor relationships and technology licenses | 5,097 |  |  | (4,022) |  |  | 1,075 |
Definite-lived trademark and trade name | 57,675 |  |  | (50,562) |  |  | 7,113 |
Core technology | 7,192 |  |  | (7,192) |  |  | — |
Capitalized software | 3,317 |  |  | (3,317) |  |  | — |
Other | 1,208 |  |  | (1,042) |  |  | 166 |
| $ | 1,086,118 |  |  | $ | (827,428) |  |  | $ | 258,690 |

Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and six months ended September 30, 2025 and 2024 (in thousands):

| Three Months Ended |  | Six Months Ended |  |
| September 30, |  | September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Amortization of intangible assets included as: |  |  |  |  |  |  |  |  |  |  |
Cost of product revenue | $ | 632 |  |  | $ | 1,073 |  |  | $ | 1,262 |  |  | $ | 2,339 |  |  |  |  |
Operating expense | 11,165 |  |  | 11,647 |  |  | 22,289 |  |  | 23,266 |  |  |  |  |
| $ | 11,797 |  |  | $ | 12,720 |  |  | $ | 23,551 |  |  | $ | 25,605 |  |  |  |  |

The following is the expected future amortization expense at September 30, 2025 for the fiscal years ending March 31 (in thousands):

2026 (remaining Six months) | $ | 23,601 |
2027 | 44,305 |
2028 | 41,335 |
2029 | 31,905 |
2030 | 29,004 |
Thereafter | 68,239 |
| $ | 238,389 |

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NOTE 9 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception.
NetScout also periodically enters into forward contracts to manage exchange rate risks associated with certain third-party transactions and for which the Company does not elect hedge accounting treatment as there is no difference in the timing of gain or loss recognition on the hedging instrument and the hedged item.
All of the Company's derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity.
The notional amounts and fair values of derivative instruments in the consolidated balance sheets at September 30, 2025 and March 31, 2025 were as follows (in thousands):

| Notional Amounts (a) |  | Prepaid Expenses and Other Current Assets |  | Accrued Other
| September 30, 2025 |  | March 31, 2025 |  | September 30, 2025 |  | March 31, 2025 |  | September 30, 2025 |  | March 31, 2025
Derivatives Designated as Hedging Instruments: |  |  |  |  |  |  |  |  |  |  |
Forward contracts | $ | 11,621 |  |  | $ | 10,649 |  |  | $ | 91 |  |  | $ | 197 |  |  | $ | 137 |  |  | $ | 55 |
|  |  |  |  | $ | 91 |  |  | $ | 197 |  |  | $ | 137 |  |  | $ | 55 |

(a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
The following table provides the effect that foreign exchange forward contracts designated as hedging instruments had on other comprehensive (loss) income and results of operations for the three months ended September 30, 2025 and 2024 (in thousands):

| Gain (Loss) Recognized in OCI on Derivative (a) |  | Gain (Loss) Reclassified from Accumulated OCI into Income (b) |  |
September 30, 2025 |  | September 30, 2024 |  | Location |  | September 30, 2025 |  | September 30, 2024 |  |  |  |  |  |
Forward contracts | $ | (182) |  |  | $ | 275 |  |  | Research and development |  | $ | 11 |  |  | $ | 3 |  |  |  |  |  |  |
|  |  |  |  | Sales and marketing |  | (157) |  |  | (18) |  |  |  |  |  |  |
| $ | (182) |  |  | $ | 275 |  |  |  |  | $ | (146) |  |  | $ | (15) |  |  |  |  |  |  |

(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates.
(b)The amount represents reclassification from other comprehensive income (loss) to earnings that occurs when the hedged item affects earnings.
The following table provides the effect that foreign exchange forward contracts designated as hedging instruments had on other comprehensive income and results of operations for the six months ended September 30, 2025 and 2024 (in thousands):

| Gain (Loss) Recognized in OCI on Derivative (a) |  | Gain (Loss) Reclassified from Accumulated OCI into Income (b)
| September 30, 2025 |  | September 30, 2024 |  | Location |  | September 30, 2025 |  | September 30, 2024
Forward contracts |  | $ | 148 |  |  | $ | 159 |  |  | Research and development |  | $ | 8 |  |  | $ | 4 |
|  |  |  |  |  | Sales and marketing |  | (325) |  |  | 40 |
|  | $ | 148 |  |  | $ | 159 |  |  |  |  | $ | (317) |  |  | $ | 44 |

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(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates.
(b)The amount represents reclassification from other comprehensive income (loss) to earnings that occurs when the hedged item affects earnings.
The Company had no forward exchange contracts not designated as hedging instruments during the six months ended September 30, 2025 and 2024.
NOTE 10 – LONG-TERM DEBT
On July 27, 2021, the Company amended and extended its existing credit facility (as amended, the Second Amended and Restated Credit Agreement), which provided for a five-year, $800.0 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. The commitments under the Second Amended and Restated Credit Agreement were set to expire on July 27, 2026, and any outstanding loans are due on that date. On May 13, 2024, the Company repaid $25.0 million of borrowings under the Second Amended and Restated Credit Agreement.
On October 4, 2024, the Company amended and restated the Second Amended and Restated Credit Agreement (as amended and restated, the Third Amended and Restated Credit Agreement) with a syndicate of lenders by and among: the Company, as borrower; certain subsidiaries of NetScout Systems, Inc., as borrower; JPMorgan Chase Bank, N.A., as administrative agent and collateral agent; JPMorgan Chase Bank, N.A., Bank of America, N.A., RBC Capital Markets, PNC Capital Markets LLC and Mizuho Bank, Ltd, as joint lead arrangers and joint bookrunners; TD Bank, N.A. and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as co-documentation agents; and the lenders and issuing banks party thereto.
The Third Amended and Restated Credit Agreement provides for a new five-year, $600.0 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. The Company may elect to use the amended credit facility for working capital and other general corporate purposes (including to repurchase shares of the Company's common stock). The commitments under the Third Amended and Restated Credit Agreement will expire on October 4, 2029, and any outstanding loans will be due on that date.
In connection with the Third Amended and Restated Credit Agreement, the Company paid off the outstanding balance of $75.0 million under the Second Amended and Restated Credit Agreement on October 4, 2024 by borrowing the same amount under the Third Amended and Restated Credit Agreement. Additionally, the Company recorded a loss on the extinguishment of debt of $1.1 million, representing the write off of unamortized deferred financing costs, which was included in interest expense in the consolidated statements of operations for the fiscal year ended March 31, 2025. On February 3, 2025, the Company paid the outstanding balance of $75.0 million in full under the Third Amended and Restated Credit Agreement. At September 30, 2025 and March 31, 2025, there were no amounts outstanding under the Third Amended and Restated Credit Agreement.
At the Company's election, revolving loans under the Third Amended and Restated Credit Agreement bear interest at either (a) a term SOFR rate plus a credit spread adjustment of 0.10% or (b) an Alternate Base Rate (defined in a customary manner), in each case plus an applicable margin. For the period from the delivery of our financial statements for the quarter ended June 30, 2025, until the Company has delivered financial statements for the quarter ended September 30, 2025, the applicable margin will be 1.00% per annum for term SOFR loans and 0% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company's consolidated gross leverage ratio, ranging from 1.00% per annum for Alternate Base Rate loans and 2.00% per annum for term SOFR loans if the Company's consolidated gross leverage ratio is greater than 3.50 to 1.00, down to 0% per annum for Alternate Base Rate loans and 1.00% per annum for term SOFR loans if the Company's consolidated gross leverage ratio is equal to or less than 1.50 to 1.00.
The Company's consolidated gross leverage ratio is the ratio of its consolidated total debt compared to its consolidated EBITDA as defined in the Third Amended and Restated Credit Agreement (consolidated adjusted EBITDA). Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the Third Amended and Restated Credit Agreement.
Commitment fees will accrue on the daily unused amount of the credit facility. For the period from the delivery of our financial statements for the quarter ended June 30, 2025, until the Company has delivered financial statements for the quarter ended September 30, 2025, the commitment fee will be 0.15% per annum, and thereafter the commitment fee will vary depending on the Company's consolidated gross leverage ratio, ranging from 0.30% per annum if the Company's consolidated gross leverage ratio is greater than 2.75 to 1.00, down to 0.15% per annum if the Company's consolidated gross leverage ratio is equal to or less than 1.50 to 1.00.
Letter of credit participation fees are payable to each lender providing the letter of credit sub-facility on the amount of such lender's letter of credit exposure, during the period from the closing date of the Third Amended and Restated Credit
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Agreement to, but excluding, the date which is the later of (i) the date on which such lender's commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for term SOFR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank.
Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on term SOFR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. The Company may also prepay loans under the Third Amended and Restated Credit Agreement at any time, without penalty, subject to certain notice requirements.
The loans and other obligations under the credit facility are (a) guaranteed by each of the Company's wholly-owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Third Amended and Restated Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Third Amended and Restated Credit Agreement.
The Third Amended and Restated Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. The Third Amended and Restated Credit Agreement provides for certain baskets that are available to the Company and its restricted subsidiaries to incur additional indebtedness, to repay junior financing, for asset sales and to make investments and restricted payments. Such baskets are substantially similar to the baskets set forth in the Company’s previous amended credit agreement.
The Third Amended and Restated Credit Agreement requires the Company to maintain a certain consolidated net leverage ratio. The Company's consolidated net leverage ratio is the ratio of its Consolidated Total Debt minus the lesser of unrestricted cash and 125% of adjusted consolidated EBITDA compared to its adjusted consolidated EBITDA. The Company's maximum consolidated net leverage ratio is 4.00 to 1.00. These covenants and limitations are more fully described in the Third Amended and Restated Credit Agreement. At September 30, 2025, the Company was in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.
The Third Amended and Restated Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Third Amended and Restated Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent may, or at the request of the holders of more than 50% in principal amount of the loans and commitments shall, terminate the commitments, accelerate the maturity of the loans and enforce certain other remedies under the Third Amended and Restated Credit Agreement and the other loan documents.
The Company had unamortized capitalized debt issuance costs, net of $3.0 million at September 30, 2025, which are being amortized over the life of the revolving credit facility. The unamortized capitalized debt issuance costs balance of $0.7 million was included as prepaid expenses and other current assets and a balance of $2.3 million was included as other assets in the Company's consolidated balance sheet at September 30, 2025.
NOTE 11 – RESTRUCTURING CHARGES
During the fiscal year 2025, the Company implemented a voluntary separation program (VSP) for employees who met certain age and service requirements to reduce overall headcount. As a result of the related workforce reduction, during the fiscal year ended March 31, 2025, the Company recorded restructuring charges of $19.6 million to one-time termination benefits for one hundred forty-two employees who voluntarily terminated their employment with the Company during the fiscal year ended March 31, 2025. All one-time termination benefits were completed in full during the first quarter of the fiscal year ending March 31, 2026.
In addition to the VSP, during the third quarter of fiscal year 2025, the Company entered into transition agreements that provided termination benefits for certain employees to ensure an orderly transition of responsibilities for continuity purposes. As a result of the related workforce changes, during the fiscal year ended March 31, 2025, the Company recorded restructuring charges totaling $0.9 million. During the six months ended September 30, 2025, the Company recorded restructuring charge s of $0.8 million. The Company estimates approximately $0.1 million and $0.1 million in remaining additional restructuring charges that will be recorded in the fiscal years ending March 31, 2026 and 2027, respectively. A majority of the one-time termination
19

benefits were paid in full by the end of the second quarter of fiscal year ending March 31, 2026, with the remaining amounts expected to be paid in full by the end of the fiscal year ending March 31, 2027.
The following table provides a summary of the activity related to the restructuring plan and the related restructuring liability (in thousands):

| Q1 FY25 VSP | Q3 FY25 Plan |
| Employee-Related | Employee-Related | Total
Balance at March 31, 2025 | $ | 9 | $ | 906 |  | $ | 915 |
Restructuring charges to operations | — |  | 833 |  | 833 |
Cash payments | (9) |  | (1,650) |  | (1,659) |
Balance at September 30, 2025 | $ | — |  | $ | 89 |  | $ | 89 |

NOTE 12 – LEASES
The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the duration of the lease term. Lease liabilities represent the Company's contractual obligation to make lease payments over the lease term. The Company's policy is to combine lease and non-lease components and to not recognize ROU assets and lease liabilities for short-term leases. Leases with an initial term of twelve months or less are classified as short-term leases. ROU assets are recorded and recognized at commencement for the lease liability amount, plus initial direct costs incurred less lease incentives received. Lease liabilities are recorded at the present value of future lease payments over the lease term at commencement. The discount rate used is generally the Company's estimated incremental borrowing rate unless the lessor's implicit rate is readily determinable. Incremental borrowing rates are calculated periodically to estimate the rate the Company would pay to borrow the funds necessary to obtain an asset of similar value over a similar term. Lease expenses relating to operating leases are recognized on a straight-line basis over the lease term.
The Company has operating leases for administrative, research and development, sales and marketing and manufacturing facilities and equipment under various non-cancelable lease agreements. The Company's leases have remaining lease terms ranging from 1 year to 6 years. The Co mpany's lease terms may include options to extend or terminate the lease where it is reasonably certain that the Company will exercise those options. The Company considers several economic factors when making this determination, including but not limited to, the significance of leasehold improvements incurred in the office space, the difficulty in replacing the asset, underlying contractual obligations, or specific characteristics unique to a particular lease. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company has asset retirement obligations (ARO) to return certain leased facilities to their original condition at the end of the respective lease term. The estimated fair value of these ARO liabilities is recognized in the period in which the liability is generated and a corresponding increase to the carrying value of the related asset is recorded and depreciated over the useful life of the asset. The Company's estimates of its ultimate AROs could change because of changes in regulations, the extent of environmental remediations required, the means of reclamation, cost estimates, exit or disposal activities or time period estimates. ARO liabilities to taled $2.3 million and $2.2 million at September 30, 2025 and March 31, 2025, respectively. ARO liabilities are included in other long-term liabilities in the consolidated balance sheets at September 30, 2025 and March 31, 2025, respectively. Accretion expense related to these liabilities was not material for any periods presented.
Most of the Company's lease agreements contain variable payments, primarily for common area maintenance, which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities.
The components of operating lease cost for the six months ended September 30, 2025 and 2024, respectively, were as fo llows (in thousands):

| Three Months Ended |  | Six Months Ended |  |
| September 30, |  | September 30, |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Lease cost under long-term operating leases | $ | 2,875 |  |  | $ | 2,966 |  |  | $ | 5,728 |  |  | $ | 5,927 |  |  |  |  |
Lease cost under short-term operating leases | 400 |  |  | 332 |  |  | 737 |  |  | 658 |  |  |  |  |
Variable lease cost under short-term and long-term operating leases | 1,091 |  |  | 762 |  |  | 2,052 |  |  | 2,078 |  |  |  |  |
Total operating lease cost | $ | 4,366 |  |  | $ | 4,060 |  |  | $ | 8,517 |  |  | $ | 8,663 |  |  |  |  |

20

The table below presents supplemental cash flow information related to leases during the six months ended September 30, 2025 and 2024 (in thousands):

| Six Months Ended
| September 30,
| 2025 |  | 2024
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 5,449 |  |  | $ | 1,177 |

At September 30, 2025 and March 31, 2025, the weighted average remaining lease term in years and weighted average discount rate were as follows:

| September 30, 2025 |  | March 31, 2025
Weighted average remaining lease term in years - operating leases | 4.67 |  | 4.77
Weighted average discount rate - operating leases | 4.4 | % |  | 4.4 | %

Future minimum payments under non-cancellable leases at September 30, 2025 are as follows (in thousands):

Year ending March 31: |
2026 (remaining six months) | $ | 5,740 |
2027 | 10,865 |
2028 | 9,808 |
2029 | 8,712 |
2030 | 7,931 |
Thereafter | 5,013 |
Total lease payments | $ | 48,069 |
Less imputed interest | (4,521) |
Present value of lease liabilities | $ | 43,548 |

NOTE 13 – COMMITMENTS AND CONTINGENCIES
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, none of the Company’s current legal proceedings and claims, if determined adversely and based on the information known to the management as of the date of this Quarterly Report, is expected to have a material adverse effect on our financial condition, results of operations or cash flows.
NOTE 14 – PENSION BENEFIT PLANS
C ertain of the Company's non-U.S. employees participate in noncontributory defined benefit pension plans. No ne of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan's funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors.
The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans recorded in operating expenses in the consolidated statements of operations for the six months ended
21

September 30, 2025 and 2024 (in thousands):

| Three Months Ended |  | Six months ended |  |
| September 30, |  | September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Service cost | $ | 44 |  |  | $ | 49 |  |  | $ | 88 |  |  | $ | 96 |  |  |  |  |
Interest cost | 278 |  |  | 256 |  |  | 555 |  |  | 501 |  |  |  |  |
Amortization of net gain | (163) |  |  | (121) |  |  | (326) |  |  | (237) |  |  |  |  |
Net periodic pension cost | $ | 159 |  |  | $ | 184 |  |  | $ | 317 |  |  | $ | 360 |  |  |  |  |

Expected Contributions
During the six months ended September 30, 2025, the Company made contributions of $0.4 million to it s d efined benefit pension plans. During the fiscal year ending March 31, 2026, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million. As a majority of the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future.
NOTE 15 – TREASURY STOCK
On May 3, 2022, the Company's board of directors approved a share repurchase program that enables the Company to repurchase up to twenty-five million shares of its common stock (2022 Share Repurchase Program). The 2022 Share Repurchase Program became effective in the third quarter of fiscal year 2024. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of the 2022 Share Repurchase Program. Through September 30, 2025, the Company repurchased 3,478,951 shares for $73.2 million under the 2022 Share Repurchase Program. The Company repurchased 1,502,230 shares for $31.6 million under this share repurchase program during the six months ended September 30, 2025. At September 30, 2025, 21,521,049 shares of common stock remained available to be purchased under the current program.
In connection with the delivery of shares of the Company's common stock upon vesting of restricted stock units, the Company withhel d 658,042 shares and 681,963 shares at a cost of $15.2 million and $13.5 million, respectively, related to minimum statutory tax withholding requirements during the six months ended September 30, 2025 and 2024, respectively. These withholding transactions do not fall under the share repurchase programs descr ibed above, and therefore do not reduce the number of shares that are available for repurchase under those programs.
22

NOTE 16 – NET LOSS PER SHARE
Calculations of the basic and d iluted net income (loss) per share and potential common shares are as follows (in thousands, except for per share data):

| Three Months Ended |  | Six months ended |
| September 30, |  | September 30, |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Numerator: |  |  |  |  |  |  |  |  |  |  |
Net income (loss) | $ | 25,828 |  |  | $ | 9,027 |  |  | $ | 22,149 |  |  | $ | (434,349) |  |  |  |  |
Denominator: |  |  |  |  |  |  |  |  |  |  |
Denominator for basic net income (loss) per share - weighted average common shares outstanding | 72,077 |  |  | 71,447 |  |  | 71,904 |  |  | 71,457 |  |  |  |  |
Dilutive common equivalent shares: |  |  |  |  |  |  |  |  |  |  |
Weighted average restricted stock units and performance-based restricted stock units | 840 |  |  | 390 |  |  | 1,225 |  |  | — |  |  |  |  |
Denominator for diluted net income (loss) per share - weighted average shares outstanding | $ | 72,917 |  |  | $ | 71,837 |  |  | $ | 73,130 |  |  | $ | 71,457 |  |  |  |  |
Net loss per share: |  |  |  |  |  |  |  |  |  |  |
Basic net income (loss) per share | $ | 0.36 |  |  | $ | 0.13 |  |  | $ | 0.31 |  |  | $ | (6.08) |  |  |  |  |
Diluted net income (loss) per share | $ | 0.35 |  |  | $ | 0.13 |  |  | $ | 0.30 |  |  | $ | (6.08) |  |  |  |  |

The following table sets forth restricted stock units excluded from the calculation of dilute d net income (loss) per sh are, since their inclusion would be anti-dilutive (in thousands):

| Three Months Ended |  | Six months ended |  |
| September 30, |  | September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Restricted stock units | 1,558 |  |  | 3,312 |  |  | 2,844 |  |  | 740 |  |  |  |  |

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options and unrecognized compensation expense as additional proceeds. As the Company incurred a net loss during the six months ended September 30, 2024, all outstanding restricted stock units including (performance-based restricted stock units) have an anti-dilutive effect and are therefore excluded from the computation of diluted weighted average shares outstanding.
NOTE 17 – INCOME TAXES
Generally, the Company's effective tax rate differs from the U.S. federal statutory income tax rate primarily due to foreign withholding taxes and U.S. taxation on foreign earnings, which are partially offset by research and development tax cr edits and the foreign derived intangible income deduction.
The Company's effective tax rates were 17.7% and 26.8% for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 differed from the effective tax rate for the three months ended September 30, 2024, primarily due to the impact of our sales mix in different geographic areas.
The Company's effective tax rates were 22.4% and 1.6% for the six months ended September 30, 2025 and 2024, respectively. The effective tax rate for the six months ended September 30, 2025 differed from the effective tax rate for the six months ended September 30, 2024 primarily related to the impact of our sales mix in different geographic areas. Also contributing to the effective tax rate change was an impact related to stock compensation and goodwill impairment incurred during the six months ended September 30, 2024, which was not deductible for tax purposes.
On July 4, 2025, new U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The Company does not expect the new legislation to have a material impact on the results of operations.
23

NOTE 18 – SEGMENT AND GEOGRAPHIC INFORMATION
The Company's operating segments are determined based on the units that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by the chief operating decision maker (CODM). The Company's President and CEO is the CODM. Operating results are reviewed by the CODM primarily at the consolidated entity level for the purpose of making resource allocation decisions and for evaluating financial performance, primarily by monitoring actual results compared to forecasted results as well as by reviewing year-over-year results. The Company's CODM evaluates company-wide performance and determines allocation of resources based on multiple performance measures, including but not limited to net income (loss).
The Company has determined it operates as a single operating segment and has one reportable segment, which includes product and service revenue related to the sale of enterprise performance management, carrier service assurance, cybersecurity, and Distributed Denial-of-Service protection solutions. The Company's results for the one reportable segment are the same as presented in the Company's consolidated statements of operations and there is no expense information that is supplemental to those disclosed in these consolidated financial statements, which are regularly provided to the CODM. The measure of segment assets is reported on the Company's consolidated balance sheet as total assets. Segment asset information is not used by the CODM to allocate resources.
The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. The Company's policies mandate compliance with economic sanctions and the export controls.
Total revenue by geography is as follows (in thousands):

| Three Months Ended |  | Six Months Ended |
| September 30, |  | September 30, |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
United States | $ | 131,164 |  |  | $ | 111,235 |  |  | $ | 231,668 |  |  | $ | 211,184 |  |  |  |  |
Europe | 33,629 |  |  | 32,094 |  |  | 64,343 |  |  | 63,488 |  |  |  |  |
Asia | 15,281 |  |  | 17,036 |  |  | 30,331 |  |  | 28,926 |  |  |  |  |
Rest of the world | 38,943 |  |  | 30,743 |  |  | 79,422 |  |  | 62,075 |  |  |  |  |
| $ | 219,017 |  |  | $ | 191,108 |  |  | $ | 405,764 |  |  | $ | 365,673 |  |  |  |  |

The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company's products to international locations. Further, the Company determines the geography of its sales after considering where the contract originated. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company's identifiable assets are located in the United States.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (SEC) on May 15, 2025 (Annual Report). This discussion contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in Part I, Item 1A "Risk Factors" in our Annual Report. These risks and uncertainties could cause actual results to differ significantly from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the section titled "Cautionary Statement Concerning Forward-Looking Statements" that appears at the beginning of this Quarterly Report. These statements, like all statements in this report, speak only as of the date of this Quarterly Report (unless another date is indicated), and, except as required by law, we undertake no obligation to update or revise these statements in light of future developments.
Overview
We are an industry leader with four decades of experience in providing service assurance and cybersecurity solutions that are based on our pioneering deep packet inspection technology at scale, which is used by many Fortune 500 companies to protect their digital business services against disruption. Service providers and enterprises, including local, state and federal government agencies, rely on our solutions to achieve the visibility and protection necessary to optimize network performance, ensure the delivery of high-quality, mission-critical applications and services, gain timely insight into the end user experience and to protect their networks from attack. With our offerings, customers can quickly, efficiently and effectively identify and resolve issues that result in downtime, interruptions to services, poor service quality or compromised data, thereby reducing meantime-to-resolution of issues and driving compelling returns on their investments in their networks and broader technology initiatives. Some of the more significant technology trends and catalysts for our business include the evolution of customers' digital transformation initiatives such as the migration to cloud environments and the edges of their networks, the rapidly evolving cybersecurity threat landscape, artificial intelligence and business analytics advancements that can help enhance observability, and the 5G technology evolution in both the service provider and enterprise customer verticals.
Our operating results are influenced by a number of factors, including, but not limited to, the volume, mix, and quantity of products and services sold, pricing, costs and availability of materials used in our products, growth in employee-related costs, including commissions, and the expansion of our operations. Factors that affect our ability to maximize our operating results include, but are not limited to, our ability to introduce and enhance existing products, the marketplace acceptance of those new or enhanced products, continued expansion into international markets, expansion into new or adjacent markets, development of strategic partnerships, competition, successful acquisition and integration efforts, and our ability to control costs, and make improvements in a highly competitive industry.
G lobal and Macroeconomic Condition s
We continue to closely monitor current global and macroeconomic conditions, including the impacts of the ongoing war in Ukraine and hostilities in the Middle East, global geopolitical tension, stock market volatility, industry-specific capital spending trends, exchange rate fluctuations, inflation, interest rates, international trade relations (including trade protection measures, such as tariffs and other trade barriers), impacts associated with the U.S. Government shutdown, and the risk of a recession, including the manner and extent to which they have impacted and could continue to impact our business, customers, employees, supply chain, and distribution network. The full extent of the impacts of these global and macroeconomic conditions remain uncertain. In response to the war in Ukraine, we ceased business operations in Russia, including sales, support on existing contracts and professional services. We remain optimistic but cognizant of ongoing macroeconomic uncertainty and constrained customer spending in the service provider market and firmly focused on driving product innovation, returning to annual revenue growth, and enhancing margins through continued disciplined cost management as we navigate the current macroeconomic landscape that may persist through fiscal year 2026. As a result, we have continued our efforts to manage discretionary costs and align spending with the current environment while we continue to execute on our long-term strategic plans.
Though we continue to monitor the impacts of evolving global and macroeconomic conditions on our business, we believe our current cash reserves and access to capital through our revolving credit facility leave us well-positioned to manage our business in today's environment. We expect net cash provided by operations combined with cash, cash equivalents, marketable securities and investments and borrowing availability under our revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. We continue to take actions to manage costs and increase productivity throughout our company, including managing discretionary spending and hiring activities, but are continuing to invest in areas that advance our business
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for the future. In addition to our cash equivalents, the Company had $600 million available under a revolving credit facility based on covenant levels at September 30, 2025.
Results Overview
Total revenue increased $40.1 million, or 11%, for the six months ended September 30, 2025, as compared to total revenue for the six months ended September 30, 2024. The increase was attributable to an increase in both product and service revenue from both our service assurance and cybersecurity offerings. Within these offerings, both our enterprise and service provider customer verticals contributed to this growth as well. Product revenue benefited from an acceleration of some U.S. Government agency related orders received in the period that were originally expected in the second half of the fiscal year ending March 31, 2026. Service revenue benefited from the timing of customer maintenance renewals.
Our gross profit percentage increased 3 percentage points to 79% during the six months ended September 30, 2025, as compared with the six months ended September 30, 2024, primarily due to increased product and service revenue growth and a more favorable product mix associated with increased licensing of our software products.
Net income for the six months ended September 30, 2025 was $22.1 million, as compared with net loss for the six months ended September 30, 2024 of $434.3 million. The decrease of $456.5 million in net loss was primarily due to a $427.0 million decrease in goodwill impairment charges, a $40.1 million increase in revenue, and a $18.1 million decrease from restructuring charges. These decreases to net loss were partially offset by a $13.4 million increase in income tax expense, an $8.0 million decrease in other income primarily due to the change in fair value of the equity investment in Napatech that was sold in August 2025, and a $6.5 million increase to employee-related expenses primarily due to an increase in variable incentive compensation.
At September 30, 2025, we had cash, cash equivalents, marketable securities and investments (current and non-current) of $526.9 million. This represents an increase of $34.4 million from $492.5 million at March 31, 2025. This increase was primarily due to $80.2 million of net cash provided by operations, a $29.6 million increase in purchases of marketable securities, $11.8 million in proceeds from the sale of our entire Napatech equity investment and a $5.1 million increase in proceeds from the maturity of marketable securities. Partially offsetting the increase was $31.6 million used to repurchase shares of our common stock, $15.2 million used for tax withholdings on restricted stock units and $4.1 million used for capital expenditures during the six months ended September 30, 2025.
Use of Non-GAAP Financial Measures
We supplement the United States GAAP financial measures we report in quarterly and annual earnings announcements, investor presentations and other investor communications by reporting the following non-GAAP measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted net income per share, and non-GAAP earnings before interest and other expense, income taxes, depreciation, and amortization from operations (Non-GAAP EBITDA from operations). Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets, share-based compensation expense, and acquisition-related depreciation expense. Non-GAAP income from operations includes the aforementioned adjustments related to non-GAAP gross profit and also removes goodwill impairment charges, executive transition costs, and restructuring charges. Non-GAAP operating margin includes the foregoing adjustments related to non-GAAP income from operations. Non-GAAP net income includes the foregoing adjustments related to non-GAAP income from operations, and also removes the income tax effects of such adjustments. Non-GAAP diluted net income per share includes the foregoing adjustments related to non-GAAP net income. Non-GAAP EBITDA from operations includes the aforementioned adjustments related to non-GAAP income from operations and also removes non-acquisition related depreciation expense.
These non-GAAP measures are not prepared in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (gross profit, operating margin, net income, and diluted net income per share), and may have limitations because they do not reflect all our results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should not be used to evaluate our results of operations against those of our peers or other companies, as the definitions and calculations of our non-GAAP measures may not be the same as those used by other companies, even if the measures share the same name.
Management believes these non-GAAP financial measures will enhance the reader's overall understanding of our current financial performance and our prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how management plans and measures our business. We believe that providing these non-GAAP measures to investors provides them with a view of our operating results that may be more easily compared to peer companies and also enables investors to consider our operating results on both a GAAP and non-GAAP basis during and following the integration period of our acquisitions. Presenting the GAAP measures on their own
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may not be indicative of our core operating results. Furthermore, management believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures provides useful information to management and investors regarding present and future business trends relating to our financial condition and results of operations.
The following table reconciles gross profit, income (loss) from operations, net income (loss) and net income (loss) per share on a GAAP and non-GAAP basis for the three and six months ended September 30, 2025 and 2024, respectively (dollars in thousands, except for per share data):
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| Three Months Ended |  | Six Months Ended
September 30, |  | September 30,
2025 |  | 2024 |  | 2025 |  | 2024
Revenue (GAAP) | $ | 219,017 |  |  | $ | 191,108 |  |  | $ | 405,764 |  |  | $ | 365,373 |
GAAP gross profit | $ | 175,407 |  |  | $ | 149,051 |  |  | $ | 318,732 |  |  | $ | 279,247 |
Share-based compensation expense | 2,227 |  |  | 2,200 |  |  | 5,387 |  |  | 5,520 |
Amortization of acquired intangible assets | 551 |  |  | 996 |  |  | 1,101 |  |  | 1,991 |
Acquisition related depreciation expense | 1 |  |  | 2 |  |  | 3 |  |  | 4 |
Non-GAAP gross profit | $ | 178,186 |  |  | $ | 152,249 |  |  | $ | 325,223 |  |  | $ | 286,762 |
GAAP income (loss) from Operations | $ | 32,486 |  |  | $ | 14,123 |  |  | $ | 25,922 |  |  | $ | (449,201) |
Share-based compensation expense | 13,557 |  |  | 14,886 |  |  | 33,516 |  |  | 36,084 |
Amortization of acquired intangible assets | 11,713 |  |  | 12,638 |  |  | 23,382 |  |  | 25,247 |
Restructuring charges | 304 |  |  | 2,409 |  |  | 833 |  |  | 18,972 |
Goodwill impairment | — |  |  | — |  |  | — |  |  | 426,967 |
Executive transition costs | — |  |  | — |  |  | 959 |  |  | — |
Acquisition related depreciation expense | 11 |  |  | 11 |  |  | 23 |  |  | 23 |
Non-GAAP income from operations | $ | 58,071 |  |  | $ | 44,067 |  |  | $ | 84,635 |  |  | $ | 58,092 |
GAAP net income (loss) | $ | 25,828 |  |  | $ | 9,027 |  |  | $ | 22,149 |  |  | $ | (434,349) |
Share-based compensation expense | 13,557 |  |  | 14,886 |  |  | 33,516 |  |  | 36,084 |
Amortization of acquired intangible assets | 11,713 |  |  | 12,638 |  |  | 23,382 |  |  | 25,247 |
Restructuring charges | 304 |  |  | 2,409 |  |  | 833 |  |  | 18,972 |
Goodwill impairment | — |  |  | — |  |  | — |  |  | 426,967 |
Executive transition costs | — |  |  |  |  | 959 |  |  |
Acquisition-related depreciation expense | 11 |  |  | 11 |  |  | 23 |  |  | 23 |
Income tax adjustments | (6,336) |  |  | (5,409) |  |  | (11,048) |  |  | (18,804) |
Non-GAAP net income | $ | 45,077 |  |  | $ | 33,562 |  |  | $ | 69,814 |  |  | $ | 54,140 |
GAAP diluted net income (loss) per share | $ | 0.35 |  |  | $ | 0.13 |  |  | $ | 0.30 |  |  | $ | (6.08) |
Per share impact of non-GAAP adjustments identified above | 0.27 |  |  | 0.34 |  |  | 0.65 |  |  | 6.83 |
Non-GAAP diluted net income per share | $ | 0.62 |  |  | $ | 0.47 |  |  | $ | 0.95 |  |  | $ | 0.75 |
GAAP income (loss) from operations | 32,486 |  |  | 14,123 |  |  | 25,922 |  |  | (449,201) |
Previous adjustments to determine non-GAAP income from operations | 25,585 |  |  | 29,944 |  |  | 58,713 |  |  | 507,293 |
Non-GAAP income from operations | 58,071 |  |  | 44,067 |  |  | 84,635 |  |  | 58,092 |
Depreciation excluding acquisition related depreciation expense | 2,630 |  |  | 3,451 |  |  | 5,406 |  |  | 7,235 |
Non-GAAP EBITDA from operations | $ | 60,701 |  |  | $ | 47,518 |  |  | $ | 90,041 |  |  | $ | 65,327 |

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Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP consistently applied. The preparation of these consolidated financial statements requires us to make significant estimates and judgments that affect the amounts reported in our consolidated financial statements and the accompanying notes. These items are regularly monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates.
While all of our accounting policies impact the consolidated financial statements, certain policies are viewed to be critical. Critical accounting policies are those that are both most important to the portrayal of our financial condition and results of operations and that require management's most subjective or complex judgments and estimates. We consider the following accounting policies to be critical in fully understanding and evaluating our financial results:
•revenue recognition; and
•valuation of goodwill.
Please refer to the critical accounting policies set forth in our Annual Report for a description of all of our critical accounting policies and estimates.
Three Months Ended September 30, 2025 and 2024
Revenue
Product revenue consists of sales of our hardware products and licensing of our software products. Service revenue consists of customer support agreements, consulting, training, subscription-based services, and stand-ready software as a service offerings. During the three months ended September 30, 2025, one channel partner who primarily serves U.S. Government agencies accounted for more than 10% of the Company's total revenue.

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Product | $ | 94,712 |  |  | 43 | % |  | $ | 81,033 |  |  | 42 | % |  | $ | 13,679 |  |  | 17 | %
Service | 124,305 |  |  | 57 |  |  | 110,075 |  |  | 58 |  |  | 14,230 |  |  | 13 | %
Total revenue | $ | 219,017 |  |  | 100 | % |  | $ | 191,108 |  |  | 100 | % |  | $ | 27,909 |  |  | 15 | %

Produ ct. The 17%, or $13.7 million, increase in product revenue compared with the same period last year was attributable to an increase in revenue from both enterprise and service provider customers from service assurance offerings and service provider customers from cybersecurity offerings. Also contributing to the increase was an acceleration of some U.S. Government agency related orders received in the period that were originally expected in the second half of the fiscal year ending March 31, 2026.
Service. The 13%, or $14.2 million, increase in service revenue compared with the same period last year was primarily due to an increase in revenue from maintenance contracts, partly due to the timing of customer maintenance renewals, as well as professional services and subscription services.
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Total revenue by geography was as follows:

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
United States | $ | 131,164 |  |  | 60 | % |  | $ | 111,235 |  |  | 58 | % |  | $ | 19,929 |  |  | 18 | %
International: |  |  |  |  |  |  |  |  |  |  |
Europe | 33,629 |  |  | 15 |  |  | 32,094 |  |  | 17 |  |  | 1,535 |  |  | 5 | %
Asia | 15,281 |  |  | 7 |  |  | 17,036 |  |  | 9 |  |  | (1,755) |  |  | (10) | %
Rest of the world | 38,943 |  |  | 18 |  |  | 30,743 |  |  | 16 |  |  | 8,200 |  |  | 27 | %
Subtotal international | 87,853 |  |  | 40 |  |  | 79,873 |  |  | 42 |  |  | 7,980 |  |  | 10 | %
Total revenue | $ | 219,017 |  |  | 100 | % |  | $ | 191,108 |  |  | 100 | % |  | $ | 27,909 |  |  | 15 | %

The 18%, or $19.9 million, increase in United States revenue compared to the same period last year was primarily due to an increase in revenue from enterprise and service provider customers from service assurance offerings, partly offset by a decrease in revenue from enterprise and service provider customers from cybersecurity offerings. Also contributing to the increase was the timing of maintenance renewal orders and an acceleration of some U.S. Government agency related orders received in the period that were originally expected in the second half of the fiscal year ending March 31, 2026. The 10%, or $8.0 million, increase in international revenue compared with the same period last year was primarily driven by an increase in revenue from service provider and enterprise customers from both cybersecurity and service assurance offerings.
Total revenue by product line was as follows:

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Service assurance | $ | 144,043 |  |  | 66 | % |  | $ | 121,676 |  |  | 64 | % |  | $ | 22,367 |  |  | 18 | %
Cybersecurity | 74,974 |  |  | 34 |  |  | 69,432 |  |  | 36 |  |  | 5,542 |  |  | 8 | %
Total revenue | $ | 219,017 |  |  | 100 | % |  | $ | 191,108 |  |  | 100 | % |  | $ | 27,909 |  |  | 15 | %

The 18%, or $22.4 million, increase in revenue from the service assurance product line compared to the same period last year was due to an increase from enterprise and service provider customers. The 8%, or $5.5 million, increase in revenue from the cybersecurity product line compared to the same period last year was due to an increase in revenue from enterprise and service provider customers. Revenue from both the service assurance and cybersecurity product lines benefited from the timing of orders and maintenance renewals within the fiscal year.
Total revenue by customer vertical was as follows:

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Service provider | $ | 84,514 |  |  | 39 | % |  | $ | 67,615 |  |  | 35 | % |  | $ | 16,899 |  |  | 25 | %
Enterprise | 134,503 |  |  | 61 |  |  | 123,493 |  |  | 65 |  |  | 11,010 |  |  | 9 | %
Total revenue | $ | 219,017 |  |  | 100 | % |  | $ | 191,108 |  |  | 100 | % |  | $ | 27,909 |  |  | 15 | %

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The 25%, or $16.9 million, increase in revenue from the service provider customer vertical was due to an increase in product and service revenue from service assurance offerings as well as an increase from cybersecurity product lines, partially offset by a decrease in cybersecurity service lines. The 9%, or $11.0 million, increase in revenue from the enterprise customer vertical was due to an increase in product and service revenue from service assurance offerings as well as an increase from cybersecurity service lines, partially offset by a decrease in cybersecurity product lines. Revenue from both the service provider and enterprise customer verticals benefited from the timing of orders and maintenance renewals within the fiscal year.
Cost of Revenue and Gross Profit
Cost of product revenue consists primarily of material components, manufacturing personnel expenses, packaging materials, overhead and amortization of capitalized software, acquired developed technology and core technology. Cost of service revenue consists primarily of personnel, material, overhead and support costs.

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Cost of revenue |  |  |  |  |  |  |  |  |  |  |
Product | $ | 11,597 |  | 5 | % |  | $ | 13,440 |  | 7 | % |  | $ | (1,843) |  |  | (14) | %
Service | 32,013 |  | 15 |  |  | 28,617 |  | 15 |  |  | 3,396 |  |  | 12 | %
Total cost of revenue | $ | 43,610 |  | 20 | % |  | $ | 42,057 |  | 22 | % |  | $ | 1,553 |  |  | 4 | %
Gross profit: |  |  |  |  |  |  |  |  |  |  |
Product $ | $ | 83,115 |  | 38 | % |  | $ | 67,593 |  | 35 | % |  | $ | 15,522 |  |  | 23 | %
Product gross profit % | 88 | % |  |  |  | 83 | % |  |  |  |  |  |
Service $ | $ | 92,292 |  | 42 | % |  | $ | 81,458 |  | 43 | % |  | $ | 10,834 |  |  | 13 | %
Service gross profit % | 74 | % |  |  |  | 74 | % |  |  |  |  |  |
Total gross profit $ | $ | 175,407 |  |  |  | $ | 149,051 |  |  |  | $ | 26,356 |  |  | 18 | %
Total gross profit % | 80 | % |  |  |  | 78 | % |  |  |  |  |  |

Product. The 14%, or $1.8 million, decrease in cost of product revenue for the three months ended September 30, 2025 compared to the same period last year was primarily driven by a 5 percentage point increase in our gross profit percentage to 88% due to a more favorable product mix associated with increased licensing of our software products.
Service. The 12%, or $3.4 million, increase in cost of service revenue for the three months ended September 30, 2025 compared to the same period last year was primarily driven by a $14.2 million or 13% increase, in service revenue, and an increase in employee-related variable incentive compensation. Our service gross profit percentage was consistent at 74% during the three months ended September 30, 2025 as compared with the three months ended September 30, 2024.
Operating Expenses

| Three Months Ended |  | Change |  |
| September 30, |  |  |
| (Dollars in Thousands) |  |  |
| 2025 |  | 2024 |  |  |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | % |  |
Research and development | $ | 40,269 |  |  | 18 | % |  | $ | 35,909 |  |  | 19 | % |  | $ | 4,360 |  |  | 12 | % |  |
Sales and marketing | 64,925 |  |  | 30 |  |  | 61,226 |  |  | 32 |  |  | 3,699 |  |  | 6 | % |  |
General and administrative | 26,261 |  |  | 12 |  |  | 23,742 |  |  | 12 |  |  | 2,519 |  |  | 11 | % |  |
Amortization of acquired intangible assets | 11,162 |  |  | 5 |  |  | 11,642 |  |  | 6 |  |  | (480) |  |  | (4) | % |  |
Restructuring charges | 304 |  |  | — |  |  | 2,409 |  |  | 1 |  |  | (2,105) |  |  | (87) | % |  |
Total operating expenses | $ | 142,921 |  |  | 65 | % |  | $ | 134,928 |  |  | 70 | % |  | $ | 7,993 |  |  | 6 | % |  |

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Research and development. Research and development expenses consist primarily of personnel expenses, fees for outside consultants, overhead and related expenses associated with the development of new products and the enhancement of existing products.
The 12%, or $4.4 million, increase in research and development expenses for the three months ended September 30, 2025 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation, partially offset by a $0.5 million decrease in employee-related costs due to a reduction in headcount, and a $0.4 million decrease in depreciation expense.
Sales and marketing. Sales and marketing expenses consist primarily of personnel expenses and commissions, overhead and other expenses associated with selling activities and marketing programs such as trade shows, seminars, advertising and new product launch activities.
The 6%, or $3.7 million, increase in total sales and marketing expenses for the three months ended September 30, 2025 compared to the same period last year was primarily due to a $3.3 million increase associated with the timing of trade shows and other events.
General and administrative. General and administrative expenses consist primarily of personnel expenses for executive, finance, legal and human resource employees, overhead and other corporate expenditures.
The 11%, or $2.5 million, increase in general and administrative expenses for the three months ended September 30, 2025 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation.
Restructuring charges. During the third quarter of fiscal year 2024, we entered into transition agreements that provided termination benefits for certain employees to ensure an orderly transition of responsibilities for continuity purposes. As a result of this related workforce change, during the three months ended September 30, 2025 we recorded restructuring charges totaling $0.3 million. During the three months ended September 30, 2024, we recorded restructuring charges totaling $2.4 million related to one-time termination benefits for twenty-three employees who voluntarily terminated their employment during the three months ended September 30, 2024.
Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest earned on our cash, cash equivalents and marketable securities, interest expense and other non-operating gains or losses.

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Interest and other expense, net | $ | (1,104) |  |  | (1) | % |  | $ | (1,797) |  |  | (1) | % |  | $ | 693 |  |  | 39 | %

The 39%, or $0.7 million, decrease in interest and other expense, net, for the three months ended September 30, 2025 compared to the same period last year was primarily due to a $1.4 million decrease in interest expense from the payoff of our credit facility balance in February 2025, a $1.0 million increase in interest income and a $1.0 million decrease in foreign exchange expense. This increase was partially offset by a $2.5 million decrease in the change in fair value of our prior equity investment in Napatech that was sold in August 2025.
Income Tax Expense. The effective tax rates were 17.7% and 26.8% for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 differed from the effective tax rate for the three months ended September 30, 2024, primarily due to the impact of our sales mix in different geographic areas.

| Three Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Income tax expense | $ | 5,554 |  |  | 3 | % |  | $ | 3,299 |  |  | 2 | % |  | $ | 2,255 |  |  | 68 | %

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Six Months Ended September 30, 2025 and 2024
Revenue
During the six months ended September 30, 2025, and 2024, no direct customer or channel partner accounted for more than 10% of our total revenue.

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Product | $ | 167,705 |  |  | 41 | % |  | $ | 142,202 |  |  | 39 | % |  | $ | 25,503 |  |  | 18 | %
Service | 238,059 |  |  | 59 | % |  | 223,471 |  |  | 61 | % |  | 14,588 |  |  | 7 | %
Total revenue | $ | 405,764 |  |  | 100 | % |  | $ | 365,673 |  |  | 100 | % |  | $ | 40,091 |  |  | 11 | %

Product. The 18%, or $25.5 million, increase in product revenue compared with the same period last year was attributable to an increase in revenue from enterprise customers from service assurance offerings and service provider customers from service assurance offerings related to radio frequency propagation modeling projects, as well as an increase in revenue from service provider and enterprise customers from cybersecurity offerings. Also attributing to the increase was an acceleration of some U.S. Government agency related orders received in the period that were originally expected in the second half of the fiscal year ending March 31, 2026.
Service. The 7%, or $14.6 million, increase in service revenue compared with the same period last year was primarily due to an increase in revenue from maintenance contracts, partly due to the timing of customer maintenance renewals, as well as cloud and subscription services.
Total revenue by geography was as follows:

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
United States | $ | 231,668 |  |  | 57 | % |  | $ | 211,184 |  |  | 58 | % |  | $ | 20,484 |  |  | 10 | %
International: |  |  |  |  |  |  |  |  |  |  |
Europe | 64,343 |  |  | 16 |  |  | 63,488 |  |  | 17 |  |  | 855 |  |  | 1 | %
Asia | 30,331 |  |  | 7 |  |  | 28,926 |  |  | 8 |  |  | 1,405 |  |  | 5 | %
Rest of the world | 79,422 |  |  | 20 |  |  | 62,075 |  |  | 17 |  |  | 17,347 |  |  | 28 | %
Subtotal international | 174,096 |  |  | 43 |  |  | 154,489 |  |  | 42 |  |  | 19,607 |  |  | 13 | %
Total revenue | $ | 405,764 |  |  | 100 | % |  | $ | 365,673 |  |  | 100 | % |  | $ | 40,091 |  |  | 11 | %

The 10%, or $20.5 million, increase in United States revenue compared to the same period last year was primarily due to an increase in revenue from service assurance offerings from enterprise customers as well as an increase in service provider customers from radio frequency propagation modeling projects, partly offset by a decrease in revenue from cybersecurity offerings to both enterprise and service provider customers. Also contributing to the increase was the timing of maintenance renewal orders and an acceleration of some U.S. Government agency related orders received in the period that were originally expected in the second half of the fiscal year ending March 31, 2026. The 13%, or $19.6 million, increase in international revenue compared with the same period last year was primarily driven by an increase in revenue from service provider and enterprise customers from both service assurance and cybersecurity offerings.
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Total revenue by product line was as follows:

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Service assurance | $ | 262,373 |  |  | 65 | % |  | $ | 238,409 |  |  | 65 | % |  | $ | 23,964 |  |  | 10 | %
Cybersecurity | 143,391 |  |  | 35 |  |  | 127,264 |  |  | 35 |  |  | 16,127 |  |  | 13 | %
Total revenue | $ | 405,764 |  |  | 100 | % |  | $ | 365,673 |  |  | 100 | % |  | $ | 40,091 |  |  | 11 | %

The 10%, or $24.0 million, increase in revenue from the service assurance product line compared to the same period last year was due to an increase in revenue from both enterprise and radio frequency propagation modeling projects, partially offset by a decrease in service provider product revenue. The 13%, or $16.1 million, increase in revenue from the cybersecurity product line compared to the same period last year was due to an increase in revenue from service provider and enterprise customers. Revenue from both the service assurance and cybersecurity product lines benefited from the timing of orders and maintenance renewals within the fiscal year.
Total revenue by customer vertical was as follows:

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Revenue: |  |  |  |  |  |  |  |  |  |  |
Service provider | $ | 160,483 |  |  | 40 | % |  | $ | 148,091 |  |  | 40 | % |  | $ | 12,392 |  |  | 8 | %
Enterprise | $ | 245,281 |  |  | 60 |  |  | 217,582 |  |  | 60 |  |  | 27,699 |  |  | 13 | %
Total revenue | $ | 405,764 |  |  | 100 | % |  | $ | 365,673 |  |  | 100 | % |  | $ | 40,091 |  |  | 11 | %

The 8%, or $12.4 million, increase in revenue from the service provider customer vertical was due to an increase in service revenue from both the service assurance and cybersecurity product lines, as well as an increase in product revenue from the cybersecurity product line. The 13%, or $27.7 million, increase in revenue from the enterprise vertical was due to an increase in product and service revenue from both the service assurance and cybersecurity product lines. Revenue from both the service assurance and cybersecurity product lines benefited from the timing of orders and maintenance renewals within the fiscal year.
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Cost of Revenue and Gross Profit

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Cost of revenue |  |  |  |  |  |  |  |  |  |  |
Product | $ | 23,522 |  | 6 | % |  | $ | 25,444 |  | 7 | % |  | $ | (1,922) |  |  | (8) | %
Service | 63,510 |  | 16 |  |  | 60,982 |  | 17 |  |  | 2,528 |  |  | 4 | %
Total cost of revenue | $ | 87,032 |  | 22 | % |  | $ | 86,426 |  | 24 | % |  | $ | 606 |  |  | 1 | %
Gross profit: |  |  |  |  |  |  |  |  |  |  |
Product $ | $ | 144,183 |  | 36 | % |  | $ | 116,758 |  | 32 | % |  | $ | 27,425 |  |  | 23 | %
Product gross profit % | 86 | % |  |  |  | 82 | % |  |  |  |  |  |
Service $ | $ | 174,549 |  | 43 | % |  | $ | 162,489 |  | 44 | % |  | $ | 12,060 |  |  | 7 | %
Service gross profit % | 73 | % |  |  |  | 73 | % |  |  |  |  |  |
Total gross profit $ | $ | 318,732 |  |  |  | $ | 279,247 |  |  |  | $ | 39,485 |  |  | 14 | %
Total gross profit % | 79 | % |  |  |  | 76 | % |  |  |  | 3 | % |  |

Product. The 8%, or $1.9 million, decrease in cost of pr oduct revenue for the six months ended September 30, 2025 compared to the same period last year was prim arily driven by a 4 percentage point increase in our gross profit percentage to 86% due to a more favorable product mix associated with increased licensing of our software products.
Service. The 4%, or $2.5 million increase in cost of service revenue for the six months ended September 30, 2025 compared to the same period last year was primarily driven by a $14.6 million, or 7%, increase, in service revenue, and an increase in employee-related variable incentive compensation. The service gross profit percentage was consistent at 73% for the six months ended September 30, 2025 when compared to the six months ended September 30, 2024.
Operating Expenses

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Research and development | $ | 80,058 |  |  | 20 | % |  | $ | 78,374 |  |  | 21 | % |  | $ | 1,684 |  |  | 2 | %
Sales and marketing | 135,520 |  |  | 33 |  |  | 131,556 |  |  | 36 |  |  | 3,964 |  |  | 3 | %
General and administrative | 54,118 |  |  | 13 |  |  | 49,323 |  |  | 13 |  |  | 4,795 |  |  | 10 | %
Amortization of acquired intangible assets | 22,281 |  |  | 5 |  |  | 23,256 |  |  | 6 |  |  | (975) |  |  | (4) | %
Restructuring | 833 |  |  | — |  |  | 18,972 |  |  | 5 |  |  | (18,139) |  |  | (96) | %
Goodwill impairment | — |  |  | — |  |  | 426,967 |  |  | 117 |  |  | (426,967) |  |  | (100) | %
Total operating expenses | $ | 292,810 |  |  | 71 | % | 0.71 | $ | 728,448 |  |  | 198 | % |  | $ | (435,638) |  |  | (60) | %

Research and development. The 2%, or $1.7 million, increase in research and development expenses for the six months ended September 30, 2025 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation, partially offset by a $1.6 million decrease in employee-related costs due to a reduction in headcount, and a $0.8 million decrease in depreciation expense.
Sales and marketing. The 3%, or $4.0 million, increase in sales and marketing expenses for the six months ended September 30, 2025 compared to the same period last year was primarily due to a $3.8 million increase associated with the timing of trade shows and other events.
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General and administrative. The 10%, or $4.8 million, increase in general and administrative expenses for the six months ended September 30, 2025 compared to the same period last year was primarily due to an increase in employee-related variable incentive compensation, a $1.3 million increase in contractor expenses and a $0.9 million increase in legal fees. These decreases were partially offset by a reduction in facility related costs.
Restructuring charges. During the third quarter of fiscal year 2024, we entered into transition agreements that provided termination benefits for certain employees to ensure an orderly transition of responsibilities for continuity purposes. As a result of this related workforce change, during the six months ended September 30, 2025 we recorded restructuring charges totaling $0.8 million. During the six months ended September 30, 2024, we recorded restructuring charges totaling $19.0 million related to one-time termination benefits for one hundred thirty-nine employees who voluntarily terminated their employment during the six months ended September 30, 2024.
Goodwill impairment. During the first quarter of fiscal year 2025, due to a decrease in our stock price and overall market capitalization, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, it was determined a Triggering Event occurred, indicating goodwill may be impaired. Accordingly, we conducted an interim quantitative impairment test of its goodwill at June 30, 2024 using the market approach to estimate the fair value of its reporting unit. As a result of that interim impairment test, we recorded a $427.0 million goodwill impairment charge during the six months ended September 30, 2024.
Interest and Other Income (Expense), Net

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Interest and other income (expense), net | $ | 2,632 |  |  | 1 | % |  | $ | 7,831 |  |  | 2 | % |  | $ | (5,199) |  |  | (66) | %

The 66%, or $5.2 million, decrease in interest and other income (expense), net, was primarily d ue to a $7.8 million decrease in the change in fair value of our equity investment in Napatech that was sold in August 2025 and a $1.2 million increase in foreign exchange expense. This decrease was partially offset by a $2.9 million decrease in interest expense and a $1.1 million increase in interest income during the six months ended September 30, 2025, when compared to the six months ended September 30, 2024.
Income Tax Expense (Benefit). Our effective tax rates were 22.4% and 1.6% for the six months ended September 30, 2025 and 2024, respectively. The effective tax rate for the six months ended September 30, 2025 differed from the effective rate for the six months ended September 30, 2024, primarily related to the impact of our sales mix in different geographic areas. Also contributing to the effective tax rate change was an impact related to stock compensation and goodwill impairment incurred during the six months ended September 30, 2024, which was not deductible for tax purposes.

| Six Months Ended |  | Change
| September 30, |
| (Dollars in Thousands) |
| 2025 |  | 2024 |
|  |  | % of Revenue |  |  |  | % of Revenue |  | $ |  | %
Income tax expense (benefit) | $ | 6,405 |  |  | 2 | % |  | $ | (7,021) |  |  | (2) | % |  | $ | 13,426 |  |  | 191 | %

Backlog
We produce our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers. We configure our products to customer specifications and generally deliver products shortly after receipt of the purchase order. Service engagements are also included in certain orders. Customers generally may reschedule or cancel unfulfilled orders with little or no penalty. Our total backlog at any particular time is not necessarily indicative of future sales levels. Within total backlog, fulfillable backlog includes what we consider to represent orders that are generally available to be delivered to customers as of the end of the reporting period. Delivery of our fulfillable backlog typically occurs early in the subsequent quarter. However, delivery may be delayed or accelerated due to various other reasons, including but not limited to, changes in timing of customer projects and product delivery schedules, which may not be within our control. Our total combined product backlog at September 30, 2025 was $39.8 million compared to $33.1 million at March 31, 2025. Combined product backlog included fulfillable backlog of $27.7 million and $25.1 million at September 30,
36

2025 and March 31, 2025, respectively. Total backlog includes orders that were received late in the quarter and radio frequency propagation modeling projects, as well as multi-year enterprise license agreements. In some cases, we have begun these projects but have not yet hit billable milestones. At September 30, 2025 and March 31, 2025 deferred revenue contained a gross balance of $2.1 million and $8.3 million, respectively, related to these radio frequency propagation modeling project orders.
Liquidity and Capital Resources
Cash, cash equivalents, marketable securities and investments consisted of the following (in thousands):

| September 30, 2025 |  | March 31, 2025
Cash and cash equivalents | $ | 483,380 |  |  | $ | 457,415 |
Short-term marketable securities and investments | 33,483 |  |  | 34,058 |
Long-term marketable securities | 10,042 |  |  | 1,004 |
Cash, cash equivalents, marketable securities and investments | $ | 526,905 |  |  | $ | 492,477 |

Cash, cash equivalents, marketable securities and investments
At September 30, 2025, cash, cash equivalents, marketable securities and investments (current and non-current) totaled $526.9 million, a $34.4 million increase from $492.5 million at March 31, 2025. This increase was primarily due to $80.2 million of net cash provided by operations, $30.4 million proceeds from sales and maturity of marketable securities, $11.8 million proceeds from the sale of our entire Napatech equity investment, partially offset by $50.6 million used to purchase marketable securities, $31.6 million used to repurchase shares of our common stock, $15.2 million used for tax withholdings on restricted stock units, $5.1 million due to effect of exchange rate changes on cash and cash equivalents, and $4.1 million used for capital expenditures, during the six months ended September 30, 2025. Cash and short-term investments held outside of the United States was approximately $223.7 million.
Cash and cash equivalents were impacted by the following:

| Six Months Ended
| September 30,
| (in thousands)
| 2025 |  | 2024
Net cash provided by operating activities | $ | 80,206 |  |  | $ | 34,699 |
Net cash used in (provided by) investing activities | $ | (12,566) |  |  | $ | 851 |
Net cash used in financing activities | $ | (46,760) |  |  | $ | (63,754) |

Net cash from operating activities
Net cash provided by operating activities of $80.2 million for the six months ended September 30, 2025 was primarily attributable to net income, as adjusted for share-based compensation expense, depreciation and amortization, deferred income taxes, and a $2.2 million working capital inflow. The working capital inflow was primarily driven by a $33.8 million decrease in accounts receivable, partially offset by a $21.7 million increase in deferred revenue and a $5.6 million increase in operating lease liabilities. The decrease in accounts receivable, as well as the increase in deferred revenue, was primarily attributed to the timing of collections and shipments as our total revenue increased $40.1 million, or 11%, for the six months ended September 30, 2025, as compared to total revenue for the six months ended September 30, 2024.
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Net cash from investing activities

| Six Months Ended
| September 30,
| (in thousands)
| 2025 |  | 2024
Cash used in (provided by) investing activities included the following: |  |  |
Purchase of marketable securities and investments | $ | (50,589) |  |  | $ | (20,999) |
Proceeds from sales and maturity of marketable securities | 30,362 |  |  | 25,290 |
Proceeds from sale of equity investment | 11,772 |  |  | — |
Purchase of fixed assets | (4,111) |  |  | (2,150) |
Purchase of intangible assets | — |  |  | (1,290) |
| $ | (12,566) |  |  | $ | 851 |

Cash used in investing activities was $12.6 million during the six months ended September 30, 2025, compared w ith $0.9 million of cash provided by investing activities during the six months ended September 30, 2024. The $13.4 million increase in cash used in investing activities was partially due to an additional $29.6 million purchase of marketable securities, and an additional $2.0 million in fixed asset purchases. Partially offsetting the increase was $11.8 mi llion in proceeds from the sale of our entire Napatech equity investment and a $5.1 million increase in proceeds from maturity of marketable securities in the six months ended September 30, 2025 as compared to the six months ended September 30, 2024.
Our investments in property and equipment consist primarily of computer equipment, demonstration units, office equipment and facility improvements. We plan to continue to invest in capital expenditures to support our infrastructure through the remainder of fiscal year 2026.
Net cash from financing activities

| Six Months Ended
| September 30,
| (in thousands)
| 2025 |  | 2024
Cash used in financing activities included the following: |  |  |
Issuance of common stock under stock plans | $ | 2 |  |  | $ | 2 |
Treasury stock repurchases | (31,565) |  |  | (25,257) |
Tax withholding on restricted stock units | (15,197) |  |  | (13,499) |
Repayment of long-term debt | — |  |  | (25,000) |
| $ | (46,760) |  |  | $ | (63,754) |

Cash used in financing activities decreased by $17.0 million to $46.8 million during the six months ended September 30, 2025, compared with $63.8 million of cash used in financing activities during the six months ended September 30, 2024.
During the six months ended September 30, 2025, we repurchased a total of approximately 1.5 million shares for $31.6 million in the open market under the 2022 Share Repurchase Program. During the six months ended September 30, 2024, we repurchased a total of approximately 1.4 million shares for $25.3 million in the open market under the Share Repurchase Program.
In connection with the delivery of our common stock upon vesting of restricted stock units, we withheld approximately 0.7 million and approximately 0.7 million shares at a cost of $15.2 million and $13.5 million related to minimum statutory tax withholding requirements on these restricted stock units during the six months ended September 30, 2025 and 2024, respectively. These withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the number of shares that are available for repurchase under that program.
During the six months ended September 30, 2025, there were no amounts outstanding under the Third Amended and Restated Credit Agreement (as defined below) and therefore no amounts repaid. During the six months ended September 30, 2024, we repaid $25.0 million of borrowings under the Second Amended and Restated Credit Agreement (as defined below).
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Sources of Cash and Cash Requirements
Credit Facility
Our third Amended and Restated Credit Agreement provides for a five-year, $600.0 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. We may elect to use the amended credit facility for working capital and other general corporate purposes (including to repurchase shares of our common stock). The commitments under the Third Amended and Restated Credit Agreement will expire on October 4, 2029, and any outstanding loans will be due on that date.
In connection with the Third Amended and Restated Credit Agreement, we paid off the outstanding balance of $75.0 million under the Second Amended and Restated Credit Agreement on October 4, 2024 by borrowing the same amount under the Third Amended and Restated Credit Agreement. Additionally, we recorded a loss on the extinguishment of debt of $1.1 million, representing the write off of unamortized deferred financing costs, which was included in interest expense in the consolidated statements of operations for the fiscal year ended March 31, 2025. On February 3, 2025, we paid the outstanding balance of $75.0 million in full under the Third Amended and Restated Credit Agreement. At September 30, 2025 and March 31, 2025 there were no amounts outstanding under the Third Amended and Restated Credit Agreement.
At our election, revolving loans under the Third Amended and Restated Credit Agreement bear interest at either (a) a term SOFR rate plus a credit spread adjustment of 0.10% or (b) an Alternate Base Rate (defined in a customary manner), in each case plus an applicable margin. For the period from the delivery of our financial statements for the quarter ended June 30, 2025, until we have delivered financial statements for the quarter ended September 30, 2025, the applicable margin will be 1.00% per annum for term SOFR loans and 0% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on our consolidated gross leverage ratio, ranging from 1.00% per annum for Alternate Base Rate loans and 2.00% per annum for term SOFR loans if our consolidated gross leverage ratio is greater than 3.50 to 1.00, down to 0% per annum for Alternate Base Rate loans and 1.00% per annum for term SOFR loans if our consolidated gross leverage ratio is equal to or less than 1.50 to 1.00.
Our consolidated gross leverage ratio is the ratio of our consolidated total debt compared to our consolidated EBITDA as defined in the Third Amended and Restated Credit Agreement (consolidated adjusted EBITDA). Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the Third Amended and Restated Credit Agreement.
Commitment fees accrue on the daily unused amount of the credit facility. For the period from the delivery of our financial statements for the quarter ended June 30, 2025, until we have delivered financial statements for the quarter ended September 30, 2025, the commitment fee will be 0.15% per annum, and thereafter the commitment fee will vary depending on our consolidated gross leverage ratio, ranging from 0.30% per annum if our consolidated gross leverage ratio is greater than 2.75 to 1.00, down to 0.15% per annum if our consolidated gross leverage ratio is equal to or less than 1.50 to 1.00.
Letter of credit participation fees are payable to each lender providing the letter of credit sub-facility on the amount of such lender's letter of credit exposure, during the period from the closing date of the Third Amended and Restated Credit Agreement to, but excluding, the date which is the later of (i) the date on which such lender's commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for term SOFR loans. Additionally, we will pay a fronting fee to each issuing bank in amounts to be agreed to between us and the applicable issuing bank.
Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on term SOFR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. We may also prepay loans under the Third Amended and Restated Credit Agreement at any time, without penalty, subject to certain notice requirements.
The loans and other obligations under the credit facility are (a) guaranteed by each of our wholly-owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) secured by substantially all of the assets of us and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by us and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Third Amended and Restated Credit Agreement generally prohibits any other liens on the assets of NetScout and our restricted subsidiaries, subject to certain exceptions as described in the Third Amended and Restated Credit Agreement.
The Third Amended and Restated Credit Agreement contains certain covenants applicable to us and our restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback
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transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. The Third Amended and Restated Credit Agreement provides for certain baskets that are available to us and our restricted subsidiaries to incur additional indebtedness, to repay junior financing, for asset sales and to make investments and restricted payments. Such baskets are substantially similar to the baskets set forth in our previous amended credit agreement.
The Third Amended and Restated Credit Agreement requires us to maintain a certain consolidated net leverage ratio. Our consolidated net leverage ratio is the ratio of our Consolidated Total Debt minus the lesser of unrestricted cash and 125% of adjusted consolidated EBITDA compared to its adjusted consolidated EBITDA. Our maximum consolidated net leverage ratio is 4.00 to 1.00. These covenants and limitations are more fully described in the Third Amended and Restated Credit Agreement. At September 30, 2025, we were in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.
The Third Amended and Restated Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Third Amended and Restated Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent may, or at the request of the holders of more than 50% in principal amount of the loans and commitments shall, terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Third Amended and Restated Credit Agreement and the other loan documents.
We had unamortized capitalized debt issuance costs, net of $3.0 million at September 30, 2025, which are being amortized over the life of the revolving credit facility. The unamortized capitalized debt issuance costs balance of $0.7 million was included as prepaid expenses and other current assets and a balance of $2.3 million was included as other assets in our consolidated balance sheet at September 30, 2025.
Cash Requirements
We are actively managing the business to generate cash flow and believe that we currently have adequate liquidity. We believe that these factors will allow us to meet our anticipated funding requirements for at least the next twelve months.
We have contractual obligations for operating leases, unconditional purchase obligations, pension benefits plans and certain other long-term liabilities. Our obligations related to these items are described further within Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report. We expect net cash provided by operating activities combined with cash, cash equivalents, marketable securities and investments and borrowing availability under our revolving credit facility will provide sufficient liquidity to fund current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and our revolving credit facility. However, macroeconomic conditions, including high inflation and interest rates, international trade relations (including trade protections measures, such as tariffs and other trade barriers), and a potential recession, could increase our anticipated funding requirements or make it more difficult for us to access capital.
A portion of our cash may be used to acquire or invest in complementary businesses or products, to obtain the right to use complementary technologies, or to repurchase shares of our common stock through our stock repurchase programs. From time to time, in the ordinary course of business, we evaluate potential acquisitions of such businesses, products or technologies. If our existing sources of liquidity are insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities. Macroeconomic conditions, including high interest rates and volatility in the capital markets, may make it difficult for us to secure additional financing on favorable terms or at all. Any sale of additional equity or debt securities could result in additional dilution to our stockholders.
Recent Accounting Pronouncements
For information with respect to recent accounting pronouncements on our consolidated financial statements, see Note 1 contained in the "Notes to Consolidated Financial Statements" included in Part I of this Quarterly Report on Form 10-Q.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk. We hold our cash, cash equivalents and investments for working capital purposes. Some of the securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain our portfolio of cash, cash equivalents and investments in a variety of securities, including money market funds and government debt securities. The risk associated with fluctuating interest rates is limited to our investment portfolio. Due to the short-term nature of these instruments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates, however, would reduce future interest income. The effect of a hypothetical 10% increase or decrease in overall interest rates would not have had a material impact on our operating results or the total fair value of the portfolio.
We are currently not exposed to any market risks related to fluctuations in interest rates related to our credit facility as we had no debt as of September 30, 2025.
Foreign Currency Exchange Risk. As a result of our foreign operations, we face exposure to movements in foreign currency exchange rates, primarily the Euro, British Pound, Canadian Dollar and Indian Rupee. The current exposures arise primarily from expenses denominated in foreign currencies. We currently engage in foreign currency hedging activities in order to limit these exposures. Periodically, we also enter into forward contracts to manage exchange risk associated with third-party transactions and for which we do not elect hedge accounting treatment. We do not use derivative financial instruments for speculative trading purposes.
At September 30, 2025, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $11.6 million. The valuation of outstanding foreign currency forward contracts at September 30, 2025 resulted in a liability balance of $0.1 million, for contracts with unfavorable rates in comparison to current market rates, and an asset balance of $0.1 million, for contracts with favorable rates in comparison to current market rates.
At March 31, 2025, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $10.6 million. The valuation of outstanding foreign currency forward contracts at March 31, 2025 resulted in a liability balance of $0.1 million, for contracts with unfavorable contract in comparison to current market rates, and an asset balance of $0.2 million, for contracts with favorable rates in comparison to current market rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical consolidated financial statements. As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates.
Item 4. Controls and Procedures
At September 30, 2025, NetScout, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, at September 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level in ensuring that material information relating to NetScout, including its consolidated subsidiaries, required to be disclosed by NetScout in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, none of the Company’s current legal proceedings and claims, if determined adversely and based on the information known to the management as of the date of this Quarterly Report, is expected to have a material adverse effect on our financial condition, results of operations or cash flows.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report. The risks discussed in our Annual Report could materially affect our business, financial condition and future results. Except as discussed below, there have been no material changes to those risk factors since we filed our Annual Report. The risks described here and in our Annual Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.
Risks Related to Our Business and Industry
Our Use of Artificial Intelligence and Machine Learning May Not Achieve Intended Benefits, and Could Adversely Affect Our Business.
We are increasingly exploring and integrating artificial intelligence (“AI”) and machine learning ("ML") technologies into our products, services, and internal operations to enhance performance, and automate processes. However, the use of AI/ML presents various risks and uncertainties that could adversely affect our business, operations, reputation, or financial results.
AI/ML technologies, including those developed by third parties and integrated into our offerings or used by our workforce or vendors, are subject to a variety of laws, including those related to data privacy, cybersecurity, and intellectual property, as well as increasing regulation and scrutiny. For example, AI/ML systems may inadvertently expose sensitive or proprietary data (including confidential, competitive, or personal information), generate inaccurate or biased outputs, or rely on training data that is incomplete, outdated, or legally restricted. While we have policies, protocols, and procedures in place, the risks may be heightened when AI/ML tools are used without appropriate oversight or outside of established governance frameworks
The evolving regulatory landscape surrounding AI/ML may impose new compliance obligations, increase operational complexity, or limit our ability to develop or deploy AI-enabled solutions. Failure to comply with these regulations, or with contractual or ethical standards related to AI/ML, could result in reputational harm, regulatory investigations, or legal liability.
In addition, if we are unable to effectively integrate AI/ML into our products and services, or if our competitors adopt AI/ML more rapidly or successfully, our competitive position may be adversely affected. The use of third-party AI/ML services also introduces risks related to service availability, cost volatility, and alignment with our business and compliance requirements.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer
The following table provides information about purchases we made during the quarter ended September 30, 2025 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act:

Period | Total Number of Shares Purchased (1) |  | Average Price Paid per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Number of Shares That May Yet be Purchased Under the Program
7/1/2025-7/31/2025 | 654,665 |  |  | $ | 22.33 |  |  | 654,665 |  |  | 21,607,365 |
8/1/2025-8/31/2025 | 86,316 |  |  | 22.41 |  |  | 86,316 |  |  | 21,521,049 |
9/1/2025-9/30/2025 | — |  |  | — |  |  | — |  |  | 21,521,049 |
Total | 740,981 |  |  | $ | 22.34 |  |  | 740,981 |  |  | 21,521,049 |

(1)On May 3, 2022, the Company's board of directors approved a share repurchase program that enables the Company to repurchase up to twenty-five million shares of its common stock (2022 Share Repurchase Program). The 2022 Share Repurchase Program became effective in the third quarter of fiscal year 2024. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of the 2022 Share Repurchase Program. For restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of shares withheld to satisfy the minimum tax withholding obligations associated with the vesting of restricted stock units. For the three months ended September 30, 2025, the total number of shares withheld for taxes associated with the vesting of restricted stock units was 60,927. These withheld shares are not issued or considered common stock repurchases under our 2022 Share Repurchase Program and therefore are not included in the preceding table.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
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Item 5. Other Information
Insider Adoption or Termination of Trading Arrangements:
During the fiscal quarter ended September 30, 2025, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408, except as described in the table below:

Name & Title | Date Adopted | Character of Trading Arrangement(1) | Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement | Duration(2) |  | Date Terminated
Sanjay Munshi, Chief Operating Officer | September 3, 2025 | Rule 10b5-1 Trading Arrangement | Up to 8,254 shares to be sold | August 31, 2026 |  | N/A
Christopher Perretta, Director | September 11, 2025 | Rule 10b5-1 Trading Arrangement | Up to 10,000 shares to be sold | March 13, 2026 |  | N/A

(1) Each trading arrangement marked as a "Rule 10b5-1 Trading Arrangement" is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the "Rule").
(2) Represents the expiration date of the Rule 10b5-1 Trading Arrangement. Pursuant to the terms of the Rule 10b5-1 Trading Arrangement, the Rule 10b5-1 Trading Arrangement may terminate earlier upon the occurrence of certain events.
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Item 6. Exhibits

3.1 |  |  | Composite conformed copy of Third Amended and Restated Certificate of Incorporation of NetScout (as amended) (filed as Exhibit 3.2 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on September 21, 2016, and incorporated herein by reference).
3.2 |  |  | Amended and Restated By-laws of NetScout (filed as Exhibit 3.1 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on May 11, 2020 and incorporated herein by reference).
10.1 |  |  | NetScout Systems, Inc. 2019 Equity Incentive Plan, as amended (filed as Exhibit 99.1 to NetScout's Registration Statement on Form S-8, SEC File No. 333-290226, filed on September 12, 2025 and incorporated herein by reference).
31.1 | + |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 | + |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 | ++ |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 | ++ |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS | + |  | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH | + |  | Inline XBRL Taxonomy Extension Schema Document.
101.CAL | + |  | Inline XBRL Taxonomy Extension Calculation Linkbase document.
101.DEF | + |  | Inline XBRL Taxonomy Extension Definition Linkbase document.
101.LAB | + |  | Inline XBRL Taxonomy Extension Label Linkbase document.
101.PRE | + |  | Inline XBRL Taxonomy Extension Presentation Linkbase document.
104 |  |  | Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibits 101).

+ | Filed herewith.
++ | Exhibit has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | NETSCOUT SYSTEMS, INC.
Date: November 6, 2025 |  | /s/ Anil K. Singhal
|  | Anil K. Singhal
|  | President, Chief Executive Officer and Chairman
|  | (Principal Executive Officer)
Date: November 6, 2025 |  | /s/ Anthony Piazza
|  | Anthony Piazza
|  | Executive Vice President and Chief Financial Officer
|  | (Principal Financial Officer)
Date: November 6, 2025 |  | /s/ Eric Watt
|  | Eric Watt
|  | Chief Accounting Officer
|  | (Principal Accounting Officer)

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