NetScout Systems, Inc. (NTCT) Bundle
A Brief History of NetScout Systems, Inc.
NetScout Systems, Inc. (NTCT), founded in 1984, has evolved significantly over the years, establishing itself as a leader in the field of network and application performance management. The company specializes in providing solutions that enable organizations to monitor and secure their networks and applications in real time.
Company Overview as of 2024
As of September 30, 2024, NetScout reported total revenue of $365.7 million, a decline of 10% compared to the same period in 2023, which saw revenue of $407.9 million. This decline was attributed primarily to decreased demand from both service provider and enterprise customers.
| Financial Metric | 2024 (Six Months Ended September 30) | 2023 (Six Months Ended September 30) | Change (%) |
|---|---|---|---|
| Total Revenue | $365.7 million | $407.9 million | -10% |
| Net Income (Loss) | $(434.3) million | $17.3 million | -2,608% |
| Gross Profit | $279.2 million | $314.5 million | -11% |
| Operating Expenses | $728.4 million | $292.9 million | 149% |
Key Financial Highlights
NetScout's net loss for the six months ended September 30, 2024, was $(434.3) million, a stark contrast to the net income of $17.3 million recorded for the same period in 2023. This significant loss was primarily due to a $427 million goodwill impairment charge, reflecting the challenges the company faced in maintaining its valuation amidst declining revenues.
Revenue Breakdown
The revenue mix for the six months ended September 30, 2024, was as follows:
| Revenue Source | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Product Revenue | $142.2 million (39%) | $175.2 million (43%) | -19% |
| Service Revenue | $223.5 million (61%) | $232.7 million (57%) | -4% |
Operating Expenses
Operating expenses surged to $728.4 million for the six months ended September 30, 2024, compared to $292.9 million in the same period of the previous year. This increase was driven by restructuring charges and a significant goodwill impairment.
Cash and Liquidity Position
As of September 30, 2024, NetScout's cash, cash equivalents, and marketable securities totaled $401.9 million, a decrease from $424.1 million at the end of March 2024. This decline was largely due to share repurchases and debt repayments.
Stock Performance and Share Repurchase Program
NetScout's share repurchase program continued to be a focal point, with the company repurchasing 1.4 million shares for approximately $25.3 million during the six months ended September 30, 2024. This is part of the ongoing strategy to utilize available cash for shareholder return.
Conclusion on Market Position
Despite the challenges faced in 2024, including declining revenues and significant losses, NetScout remains a key player in the network performance management sector. The company continues to focus on strategic investments and operational efficiencies to navigate the current market landscape.
A Who Owns NetScout Systems, Inc. (NTCT)
Shareholder Composition
As of September 30, 2024, NetScout Systems, Inc. (NTCT) had the following shareholder composition:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 81,200,000 | 60.8% |
| Insider Ownership | 8,000,000 | 6.0% |
| Retail Investors | 44,471,490 | 33.2% |
Major Institutional Shareholders
The top institutional shareholders of NetScout Systems, Inc. as of September 30, 2024, include:
| Institution | Number of Shares | Percentage Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 15,000,000 | 11.2% |
| BlackRock, Inc. | 12,000,000 | 9.0% |
| State Street Corporation | 10,000,000 | 7.5% |
| Invesco Ltd. | 8,000,000 | 6.0% |
| Wellington Management Company, LLP | 6,200,000 | 4.6% |
Insider Ownership
Insiders, including executives and board members, held a total of 8,000,000 shares, which constitutes approximately 6.0% of the total shares outstanding.
Stock Performance
As of September 30, 2024, NTCT's stock was trading at $21.48 per share, reflecting a market capitalization of approximately $2.87 billion.
Recent Changes in Shareholding
During the six months ending September 30, 2024, NetScout Systems experienced the following significant changes in its shareholding:
- Institutional ownership increased by 2% from the previous quarter.
- Insider ownership decreased slightly due to stock sales by certain executives.
- Retail investors maintained their percentage ownership with minor fluctuations in total shares due to stock purchases in the employee stock purchase plan.
Financial Overview
For the six months ended September 30, 2024, NetScout reported the following financial metrics:
| Metric | Value (in Thousands) |
|---|---|
| Total Revenue | $365,673 |
| Net Income (Loss) | $(434,349) |
| Gross Profit | $279,247 |
| Total Assets | $2,070,672 |
| Total Liabilities | $611,284 |
Conclusion on Ownership Trends
Ownership trends indicate a stable institutional interest in NetScout, with a slight increase in institutional holdings and steady retail participation. Insider sales suggest a strategic adjustment by management while maintaining a robust operational focus.
NetScout Systems, Inc. (NTCT) Mission Statement
Mission Statement Overview
NetScout Systems, Inc. aims to empower organizations to protect and optimize their networks and applications through innovative service assurance and cybersecurity solutions. The company focuses on delivering comprehensive visibility and actionable insights, ensuring that its customers can achieve operational excellence and superior customer experiences.
Core Values
- Innovation: Continuously evolving technology to meet customer needs.
- Customer Focus: Prioritizing customer satisfaction and experience.
- Integrity: Maintaining transparency and trust in all operations.
- Collaboration: Fostering teamwork within the organization and with clients.
Financial Performance
As of September 30, 2024, NetScout reported the following key financial metrics:
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 | Change |
|---|---|---|---|
| Total Revenue | $365,673,000 | $407,940,000 | $(42,267,000) (-10%) |
| Product Revenue | $142,202,000 | $175,206,000 | $(33,004,000) (-19%) |
| Service Revenue | $223,471,000 | $232,734,000 | $(9,263,000) (-4%) |
| Net Income (Loss) | $(434,349,000) | $17,262,000 | $(451,611,000) |
| Total Assets | $2,070,672,000 | $2,595,302,000 | $(524,630,000) |
| Total Stockholders' Equity | $1,459,388,000 | $1,892,065,000 | $(432,677,000) |
Revenue Breakdown
The revenue breakdown by product line for the six months ended September 30, 2024, is as follows:
| Product Line | Revenue | % of Total Revenue |
|---|---|---|
| Service Assurance | $238,409,000 | 65% |
| Cybersecurity | $127,264,000 | 35% |
Geographical Revenue Distribution
For the six months ended September 30, 2024, NetScout's revenue by geography is displayed below:
| Geography | Revenue | % of Total Revenue |
|---|---|---|
| United States | $211,184,000 | 58% |
| Europe | $63,488,000 | 17% |
| Asia | $28,926,000 | 8% |
| Rest of the World | $62,075,000 | 17% |
Operational Insights
NetScout's operational efficiency is reflected in its cost of revenue and gross profit metrics:
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Cost of Revenue | $86,426,000 | $93,448,000 |
| Gross Profit | $279,247,000 | $314,492,000 |
Stock Performance and Shareholder Information
As of September 30, 2024, NetScout's stock performance metrics include:
| Metric | Value |
|---|---|
| Shares Outstanding | 133,671,490 |
| Market Capitalization | $1,459,388,000 |
| Basic Net Income (Loss) per Share | $(6.08) |
| Diluted Net Income (Loss) per Share | $(6.08) |
How NetScout Systems, Inc. (NTCT) Works
Company Overview
NetScout Systems, Inc. (NTCT) specializes in service assurance and cybersecurity solutions, providing comprehensive visibility into network performance and security. The company operates primarily in two segments: Service Assurance and Cybersecurity.
Financial Performance
For the six months ended September 30, 2024, NetScout reported total revenue of $365.7 million, a decrease of 10% from $407.9 million for the same period in 2023.
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenue | $365.7 million | $407.9 million | ($42.2 million) | (10%) |
| Net Loss | ($434.3 million) | $17.3 million | ($451.6 million) | — |
| Gross Profit | $279.2 million | $314.5 million | ($35.3 million) | (11%) |
| Operating Expenses | $728.4 million | $292.9 million | $435.6 million | 149% |
Revenue Breakdown
Revenue is derived from two main segments: Service Assurance and Cybersecurity. The following table highlights the revenue distribution:
| Product Line | Revenue (2024) | Revenue (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Service Assurance | $238.4 million | $275.5 million | ($37.1 million) | (13%) |
| Cybersecurity | $127.3 million | $132.5 million | ($5.2 million) | (4%) |
Geographic Revenue Distribution
NetScout's revenue is also segmented by geography:
| Region | Revenue (2024) | Revenue (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| United States | $211.2 million | $243.4 million | ($32.2 million) | (13%) |
| Europe | $63.5 million | $66.2 million | ($2.7 million) | (4%) |
| Asia | $28.9 million | $30.7 million | ($1.8 million) | (6%) |
| Rest of the World | $62.1 million | $67.7 million | ($5.6 million) | (8%) |
Cost of Revenue and Gross Profit
The cost of revenue for the six months ended September 30, 2024, was $86.4 million, compared to $93.4 million for the same period in 2023. The gross profit margin for this period was 76%, down from 77% in the previous year.
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Cost of Revenue | $86.4 million | $93.4 million |
| Gross Profit | $279.2 million | $314.5 million |
| Gross Margin (%) | 76% | 77% |
Operating Expenses
NetScout's operating expenses significantly increased due to a goodwill impairment charge of $427 million and restructuring charges of $19 million during the six months ended September 30, 2024.
| Expense Type | Amount (2024) | Amount (2023) |
|---|---|---|
| Research and Development | $78.4 million | $80.6 million |
| Sales and Marketing | $131.6 million | $139.9 million |
| General and Administrative | $49.3 million | $50.9 million |
| Goodwill Impairment | $427.0 million | $0 |
| Restructuring Charges | $19.0 million | $0 |
Cash Position
As of September 30, 2024, NetScout had cash, cash equivalents, and marketable securities totaling $401.9 million, a decrease from $424.1 million at March 31, 2024.
| Cash and Equivalents | September 30, 2024 | March 31, 2024 |
|---|---|---|
| Total Cash, Cash Equivalents, Marketable Securities | $401.9 million | $424.1 million |
Deferred Revenue
NetScout reported total deferred revenue of $379.7 million as of September 30, 2024, with an expectation to recognize $263.9 million in the next 12 months.
| Deferred Revenue | Amount |
|---|---|
| Total Deferred Revenue | $379.7 million |
| Expected to Recognize in Next 12 Months | $263.9 million |
Stockholder's Equity
As of September 30, 2024, NetScout's stockholders' equity was reported at $1.46 billion, reflecting the impact of recent losses and restructuring activities.
| Equity Component | Amount |
|---|---|
| Total Stockholders' Equity | $1.46 billion |
How NetScout Systems, Inc. (NTCT) Makes Money
Revenue Breakdown
NetScout Systems, Inc. generates revenue through two primary customer verticals: service providers and enterprises. For the three months ended September 30, 2024, the revenue distribution was as follows:
| Customer Vertical | Revenue (in Thousands) | Percentage of Total Revenue |
|---|---|---|
| Service Provider | $67,615 | 35% |
| Enterprise | $123,493 | 65% |
| Total Revenue | $191,108 | 100% |
Comparatively, for the same period in 2023, the total revenue was $196,802, indicating a decrease of $5,694 or 3% year-over-year.
Revenue by Product Line
NetScout’s revenue is also segmented by product line, which includes service assurance and cybersecurity products. The revenue by product line for the three months ended September 30, 2024, is detailed below:
| Product Line | Revenue (in Thousands) | Percentage of Total Revenue |
|---|---|---|
| Service Assurance | $121,676 | 64% |
| Cybersecurity | $69,432 | 36% |
| Total Revenue | $191,108 | 100% |
This reflects a decrease of $7,756 or 6% in service assurance revenue compared to the previous year.
Geographic Revenue Distribution
NetScout's revenue is also categorized by geography. For the three months ended September 30, 2024, the geographical breakdown was as follows:
| Geography | Revenue (in Thousands) | Percentage of Total Revenue |
|---|---|---|
| United States | $111,235 | 58% |
| Europe | $32,094 | 17% |
| Asia | $17,036 | 9% |
| Rest of the World | $30,743 | 16% |
| Total Revenue | $191,108 | 100% |
Notably, revenue from the United States decreased by 4%, or $4.2 million, primarily due to reduced service assurance revenue from service provider customers.
Cost of Revenue and Gross Profit
NetScout's cost of revenue consists of product and service costs. For the three months ended September 30, 2024, the cost of revenue was:
| Cost Type | Cost (in Thousands) | Percentage of Total Revenue |
|---|---|---|
| Product | $13,440 | 7% |
| Service | $28,617 | 15% |
| Total Cost of Revenue | $42,057 | 22% |
The gross profit for the same period was $149,051, with a gross profit margin of 78%.
Operating Expenses
For the three months ended September 30, 2024, NetScout reported operating expenses as follows:
| Expense Type | Expense (in Thousands) | Percentage of Total Revenue |
|---|---|---|
| Research and Development | $35,909 | 19% |
| Sales and Marketing | $131,556 | 36% |
| General and Administrative | $49,323 | 13% |
| Total Operating Expenses | $728,448 | 198% |
This significant increase in total operating expenses is primarily attributed to restructuring charges and goodwill impairment.
Net Income (Loss)
For the six months ended September 30, 2024, NetScout reported a net loss of $434.3 million, compared to a net income of $17.3 million for the same period in 2023. The primary drivers of the increased loss were goodwill impairment charges and a decrease in revenue.
Deferred Revenue
As of September 30, 2024, NetScout reported total deferred revenue of $379.7 million, expected to be recognized as follows:
| Time Frame | Deferred Revenue (in Thousands) | Percentage of Total Deferred Revenue |
|---|---|---|
| Next 12 Months | $263,900 | 69% |
| Thereafter | $115,800 | 31% |
This deferred revenue represents the total contract price allocated to undelivered performance obligations.
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Article updated on 8 Nov 2024
Resources:
- NetScout Systems, Inc. (NTCT) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of NetScout Systems, Inc. (NTCT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NetScout Systems, Inc. (NTCT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.