NetScout Systems, Inc.

Please stand by. Your program is about to begin. Ladies and gentlemen, thank you for standing by. And welcome to NETSCOUT's third quarter fiscal year 2025 financial results conference call. At this time, all parties are in a listen-only mode and tell the question and answer portion of the call. As a reminder, this call is being recorded. Tony Piazza, NETSCOUT's deputy CFO, and his colleagues at NETSCOUT are on the call with us today. If you require operator assistance at any time, please press star zero. I would now like to turn the call over to Tony Piazza to begin the company's prepared remarks.

Thank you, operator, and good morning, everyone. Welcome to NETSCOUT's third quarter fiscal year 2025 conference call for the period ended December 31st, 2024. Joining me today are Anil Singhal, NETSCOUT's President and Chief Executive Officer, Michael Sabados, NETSCOUT's Chief Operating Officer, and Gene Bua, NETSCOUT's Executive Vice President and Chief Financial Officer. There is a slide presentation that accompanies our prepared remarks. You can advance the slides in the webcast viewer to follow our commentary. Both the slides and the prepared remarks can be accessed in multiple areas within the investor relations section of our website at www.netscout.com. including the IR landing page under financial results, the webcast itself, and under financial information on the quarterly results page. Moving on to slide number three, today's conference call will include forward-looking statements. Examples of forward-looking statements include statements regarding our future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. Actual results could differ materially from any forward-looking statements. These statements speak only as of today's date and involve risks and uncertainties, including but not limited to those described on this slide and in today's financial results press release, which are available on the investor relations section of our website, as well as in the company's most recent annual report on Form 10-K and subsequent SEC filings. on file with the Securities and Exchange Commission. NESCAP assumes no obligation to update any forward-looking information except as required by law. Let's now turn to slide number four, which involves non-GAAP metrics. While this slide presentation includes both GAAP and non-GAAP results, unless otherwise stated, financial information discussed on today's conference call will be on a non-GAAP basis only. The rationale for providing non-GAAP measures, along with the limitations of relying solely on those measures, is detailed on this slide and in today's press release. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with the GAAP. Reconciliations of all non-GAAP metrics will be applicable if GAAP measures are provided in the appendix of the slide presentation in today's earnings press release and on our website. I will now turn the call over to Anil for his prepared remarks.

Anil? Thank you, Tony, and good morning, everyone. Welcome and thank you all for joining us today. We delivered Q3 fiscal year 2025 revenue and earnings results that exceeded our expectations with strong performance across both our cybersecurity and service assurance product lines. These results reflect solid execution and the strength of our differentiated solution in addressing the evolving needs of our customers. It's important to note that certain customer orders initially anticipated in the fourth quarter were instead received in the third quarter as customers leveraged the calendar year end budgets. While the timing accelerated certain revenues into Q3, The contribution of these early orders have reinforced our confidence in achieving our full fiscal year 2025 goals and expectations. As we capitalize on opportunity and address the complexity of today's market, we remain confident in our ability to deliver value and meet our customers' cybersecurity and service assurance needs now and into the future. Let's turn to slide number six for a brief recap of our non-GAAP financial results for the third quarter, and first nine months of fiscal year 2025. For the third quarter, revenue was approximately $252 million, up approximately 16% compared to the prior year period. This performance was driven by strong results in both our cybersecurity and service assurance product lines. Diluted earnings per share was $0.94 for the third quarter, which was up approximately 29% from previous year. For the first nine months of the fiscal year 2025, or the period ended December 31, 2024, revenue was approximately $618 million, down approximately 1% year-over-year, reflecting the impact of previously disclosed headwinds. This included unusually high levels of backlog-related revenue and the test optimization business diversions that both benefited the prior year's results and affected the comparisons. The corresponding diluted earnings per share for the first nine months of the fiscal year 2025 was $1.70, an increase of approximately 3% year over year. Now let's move to slide number seven for some further perspective on business and market insights. Starting with our service assurance offering, revenue in the third quarter increased approximately 9%, driven by the acceleration of a large service provider order previously expected in our fourth quarter. For the first nine months of the fiscal year 2025, service assurance revenue was down approximately 5%, primarily due to the previously discussed backlog and deficit-related headwinds. In the service provider customer vertical of our service assurance business, carriers continue to invest in 5G initiatives, at a measured pace as they manage investments against monetization opportunities. On the enterprise front, customers are seeking solutions capable of better advancing their digital transformations and extending visibility to the edges of their network. Our new edge solutions are gaining traction in this area. Moving to our cybersecurity offerings, revenue in the third quarter increased approximately 29%, and increased approximately 7% for the first nine months for the fiscal year 2025. Cybersecurity continues to represent a solid growth opportunity for NetScout, as customers prioritize spending to protect themselves from the expanding cyber threat landscape, not only related to the data center, but at the edge of their networks as well. Accordingly, we continue to enhance our cybersecurity offering with solutions like Adaptive DDoS. For example, we recently announced that our Arbor Edge Defense and Arbor Enterprise Manager products are now updated with artificial intelligence and machine learning technology as part of our adaptive DDoS protection solution to combat AI-enabled DDoS threats. Michael will provide more insight regarding customers in our operating area during remarks. Now let's move to slide number eight to review our outlook. Given our strong performance in the third quarter, along with the acceleration of certain orders, we now have increased visibility and confidence in achieving our full fiscal year 2025 financial objectives. As such, with one quarter remaining in the fiscal year, we are updating our fiscal year 2025 outlook, narrowing the ranges while maintaining the midpoint from the previous guidance for revenue and non-GAAP net income per share. Jean will provide additional color in our outlook in her remarks. Looking ahead, we remain focused on executing effectively as we position the company for the fiscal year 2026 and beyond. At the same time, we continue to leverage the strength of our Visibility Without Borders platform to enable customers to address the performance, availability, and security challenges inherent into this complex digital landscape. We look forward to sharing our progress with everyone at the conclusion of our fiscal year. With that, I'll turn the call over to Michael.