NetScout Systems, Inc.

Ladies and gentlemen, thank you for standing by and welcome to NETSCOUT's first quarter fiscal year 2027 financial results conference call. At this time, all parties are in a listen-only mode. A question and answer session will follow the management team's prepared remarks. As a reminder, this call is being recorded. If you require operator assistance at any time, please press star zero. I would now like to turn the call over to Scott Dressel, NETSCOUT's VP of Corporate Finance. Scott, please go ahead.

Thank you, operator, and good morning, everyone. Welcome to NETSCOUT's first quarter fiscal year 2027 conference call for the period ended June 30, 2026. Joining me today are Anil Singhal, NETSCOUT's President and Chief Executive Officer, and Tony Piazza, NETSCOUT's Executive Vice President and Chief Financial Officer. Please note that this slide presentation 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 and the quarterly results page. As discussed in detail on slide number three, Today's conference call will include certain forward-looking statements about NetScout's views on expected results of future performance and business strategy. These statements speak only as of today's date and involve risks, uncertainties, and assumptions that may cause actual results to differ materially, including but not limited to those described in the company's filings with the Securities Exchange Commission, including our annual report on Form 1010, and Quarterly Reports on Form 10-Q. As discussed in detail in slide number four, today's conference call will also include discussion of certain non-GAAP financial measures that the company believes to be useful for investors. While this slide presentation includes both GAAP and non-GAAP results, other than revenue and balance sheet information, which are presented in accordance with GAAP, we'll focus our discussion on non-GAAP financial information These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations of all non-GAAP metrics to the nearest GAAP measures are provided in the appendix of the slide presentation and today's financial results press release and on our website. I will now turn the call over to Anil for his prepared remarks.

Anil. Thank you, Scott, and good morning, everyone. We appreciate you joining us today. In the first quarter of fiscal year 2027, we delivered strong top and bottom line results, and the enterprises and service providers continue to rely on NETSCOT for mission-critical, high-fidelity visibility across increasingly complex digital environments. We executed well against our strategic priorities and believe we are in a good position to achieve our fiscal year 2027 objectives of investing in innovation, driving profitable growth, Expanding Margins, and Generating Solid Free Cash Flow. Service Assurance performed well, reflecting in part government-related demand, while cybersecurity delivered results consistent with the prior year. Overall, our first-part results reflect disciplined execution and keep us on track with our full-year outlook. Our investment innovations continue to use differentiated patented technologies that generate High Fatality AI Ready Smart Data. These capabilities provide customers with a trusted data foundation for advanced analytics, automation, and AI-enabled decision making across observability, AIOps, service assurance, cybersecurity, and DDoS attack protection solutions. In June, we reached an important milestone with the granting of our 750th patent, demonstrating the strength of our R&D engine and the durability of our technology modes around our smart data platform and AI-enabled applications. Digital complexity and fragmented visibility increase the need for trusted data, stronger resilience, and more efficient operations. We believe our portfolio helps customers manage that complexity, reduce risk, and improve efficiency, all of which reinforce the long-term growth potential of our business. With that context, let me turn to slide six for a brief review of our fiscal year 2010-27 financial performance for the period ending June 30, 2026. For the first quarter, total revenue increased by 13% to $210 million, compared with $187 million for the same period last year. We expanded both our gross and operating margins nicely in the quarter. The diluted earnings per share was $0.52 compared with $0.34 in the same period last year. Now let's turn to slide seven for some perspective on our business and some market insights. Starting with the review of our service-assured offerings, revenue grew approximately 20% year-over-year, benefiting in part from government-related orders, including orders that were received earlier than anticipated as the customer advanced their deployment plans. Growth also reflected sales of our newest innovation, including our OmniSensor and Streamr products, which make our high-fidelity metadata available in observability, cybersecurity, and AIOps platform across our partner ecosystem. This enables our customer to leverage the real-time visibility we provide to improve automated workflows and critical investigations across the business. Enterprise customers are turning to our service assurance solutions to close visibility gaps created by hybrid cloud, remote work, automation, and AI workloads. These environments are inherently complex, with more traffic paths, potential points of failure, and operational silos across network application, observability, and security teams. With greater exposure to downtime, there are consequences can be significant from an operational, legal, and financial standpoint. Our service providers and customers remain focused on reducing network cost and complexity. They are also working to improve automation across fixed, mobile, and edge environments. NETSCORE 5G observability solutions give customers end-to-end visibility for standalone 5G networks. They also support machine-critical applications and emerging use cases, including fixed wireless access, network slicing, and Immersive Services. Carrier spending remains disciplined. Even so, we continue to see opportunities for a solution to help customers improve efficiency and monetize next-generation network investments. Turning to cybersecurity, revenue increased approximately 1% year-over-year. We achieved that growth despite a typical comparison to prior year period, which grew in the high teens due to the timing of some large projects. Both our enterprise and carrier-approved customers' verticals grew modestly in the quarters, and we continue to view cybersecurity as an important long-term growth opportunity for NETSCAR. Our previously discussed May acquisition of digital DDoS attack protection business assets Together with our recently announced capacity expansion reflects a deliberate strategy to scale our cloud with greater control, efficiency, and speed. By bringing the platform back and infrastructure fully in-house, we have created the operational and architectural foundation to invest more quickly and efficiently in capacity. That work culminated in the doubling of our mitigation capability to 30 series terabits per second. It also gives us a tighter alignment between infrastructure and threat intelligence, faster innovation cycles, and improved margin potential through immediately accurate tracking revenues. These actions strengthen ArgoCloud as a more resilient, vertically integrated cloud platform. They also position NetCloud to help customers respond to the rapidly escalating scale and complexity of attacks while delivering consistent, high-performance protection for mission-critical, always-on digital environments. Turning to AI, we believe it is creating a long-term growth opportunity across our portfolio. It's also bringing service assurance and cybersecurity closer together as customers look for solutions that can automate workflows, support AI-enabled applications, and enlarge volumes of data across hybrid environments. These trends increase the need for unused visibility, observability, and cybersecurity. They also reinforce the value of NETSCOT smart data. With packet-level precision, automation, and analytics, our AI-ready smart data helps customers find root causes faster, improve efficiency, strengthen cyber resilience, and connect more effectively with broader observability, Security Operations, and Emerging Agentic AI Frameworks. Turning to customer gains, we saw continued demand across both service assurance and cybersecurity. In the quarter, we secured new customers and repeat business from existing customers for investing in new solutions, upgrades, and maintenance services. These gains demonstrate the continued relevance of our portfolio, the depth of our customer relationship, and the opportunity to expand across our install base. Highlights from the first quarter included the following. First, we completed multiple government agency-related deals in service assurance and cybersecurity with an aggregate value in the low eight digits that included our OmniSensor, OmniStreamer, and Cyber Intelligence solutions. And another agency selected NETCODE to support modernization and zero stress security at the edge. Second, we signed a multi-million dollar agreement with a long-standing international service provider restaurant. Third, customer expanded its NEXCOR cyber security portfolio to strengthen DDoS attack protection in response to a heightened threat environment. Third, we secured a seven-figure deal with a U.S. financial institution that included our ominous ClearSight sensor. This solution addresses visibility challenges in large, multi-cluster, Kubernetes deployment. The customer selected NETSCOT for our ability to deliver deep, actionable, real-time insight into system performance, health and cost drivers, or customer-facing banking application in virtual environments. With that, let's move on to slide number eight and review our outcome. With a solid start to the fiscal year, We remain focused on profitable growth, health-free cash flow generation, and long-term shareholder value. And we are reaffirming our full fiscal year 26-27 outlook. Customers remain disciplined in their overall spending, and we are managing the business with that environment in mind. At the same time, we see meaningful long-term opportunities in AIOPS, observability, service assurance, and cybersecurity, and DDoS attack protection. will continue to invest in innovation with a focus on advanced cybersecurity capabilities, adaptive DDoS protection, and using our data and intelligence to power AI-driven workflows in observability and service assurance, all aimed at enhancing resilience and service reliability for our customers. We'll also maintain disciplined cost management and a balanced approach to capital allocation to support attractive returns for our shareholders. Finally, we are looking forward to hosting customers and partners at our annual Engage Technology and User Summit in Texas in October. This year's theme is Moving from Proactive to Protective and reflects an important shift in our markets. Customers want to move beyond monitoring. They want to detect issues earlier, predict outcomes faster and more accurately, explain what's happening, and automate more decisions. Engage 2026 will demonstrate how NETSCOUT AI-ready smart data provides the trusted data foundations for that shift. That includes support for observability, cybersecurity, AIOps, and emerging agent incorporation, while also helping customers control costs and keep their data secure and on-premises. We'll feature our newest innovation, including a Genius Co-Pilot, will give user access to smart data in natural language. We'll also showcase evidence-driven cybersecurity incident response and AI-powered adaptive DDoS attack protection. With that, I will turn the call over to Tony for a review of our financial performance and our outlook.