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 ~~December~~June 3130, ~~2024~~2025


☐			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 ~~January~~July 3028, 2025 was 71,~~754~~875,~~689~~269.

Table of Contents

NETSCOUT SYSTEMS, INC.

FORM 10-Q

FOR THE QUARTER ENDED ~~DECEMBER~~JUNE 3130, ~~2024~~2025

TABLE OF CONTENTS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		1
PART I: FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements:
	Consolidated Balance Sheets: At December 31, 2024 and March 31, 2024	2
	Consolidated Balance Sheets: At June 30, 2025 and March 31, 2025	2
	Consolidated Statements of Operations: For the three and nine months ended December 31, 2024 and 2023	3
	Consolidated Statements of Operations: For the three months ended June 30, 2025 and 2024	3
	Consolidated Statements of Comprehensive Income (Loss): For the three and nine months ended December 31, 2024 and 2023	4
	Consolidated Statements of Comprehensive Loss: For the three months ended June 30, 2025 and 2024	4
	Consolidated Statements of Stockholder's Equity: For the three and nine months ended December 31, 2024 and 2023	5
	Consolidated Statements of Stockholders' Equity: For the three months ended June 30, 2025 and 2024	5
	Consolidated Statements of Cash Flows: For the nine months ended December 31, 2024 and 2023	7
	Consolidated Statements of Cash Flows: For the three months ended June 30, 2025 and 2024	6
	Notes to Consolidated Financial Statements	87
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2623
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4435
Item 4.	Controls and Procedures	4435
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	4536
Item 1A.	Risk Factors	4536
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4536
Item 3.	Defaults Upon Senior Securities	4536
Item 4.	Mine Safety Disclosures	4536
Item 5.	Other Information	4637
Item 6.	Exhibits	4738
SIGNATURES		4839

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

In addition to historical information, 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. These statements relate to future events or our future financial performance and are identified by terminology 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, ~~2024~~2025, filed with the Securities and Exchange Commission, 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.

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)

	December 31,2024		March 31,2024
	June 30,2025		March 31,2025
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	~~398~~489,~~361~~572	$	~~389~~457,~~674~~415
Marketable securities and investments	2842,~~536~~937		3334,~~459~~058
Accounts receivable and unbilled costs, net of allowance for credit allowances of $85 and $479 at December 31, 2024 and March 31, 2024, respectively	214,585		192,096
Accounts receivable and unbilled costs, net of allowance for credit losses of $92 and $214 at June 30, 2025 and March 31, 2025, respectively	92,200		163,654
Inventories and deferred costs	1413,~~414~~047		1412,~~095~~891
Prepaid income taxes	814,800		1113,~~076~~380
Prepaid expenses and other current assets	2731,~~461~~359		3231,~~094~~786
Total current assets	~~692~~683,~~157~~915		~~672~~713,~~494~~184
Fixed assets, net	2221,~~054~~494		2621,~~487~~529
Operating lease right-of-use assets	36,~~582~~226		4237,~~486~~717
Goodwill	1,~~079~~070,~~111~~155		1,~~502~~076,~~820~~383
Intangible assets, net	~~270~~249,~~027~~902		~~308~~258,~~659~~690
Deferred income taxes	6272,~~519~~689		3066,~~767~~294
Long-term marketable securities	110,~~015~~997		~~994~~1,004
Other assets	1112,~~280~~048		1011,~~595~~777
Total assets	$	2,~~174~~157,~~745~~426	$	2,~~595~~186,~~302~~578
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1314,~~693~~016	$	1418,~~506~~208
Accrued compensation	5446,~~657~~978		5156,~~362~~696
Accrued other	1620,~~915~~310		1419,~~665~~397
Income taxes payable	~~764~~884		~~764~~883
Deferred revenue and customer deposits	~~284~~293,~~783~~911		301,~~806~~753
Current portion of operating lease liabilities	10,~~959~~883		1110,~~979~~995
Total current liabilities	~~381~~386,~~771~~982		~~395~~407,~~082~~932
Other long-term liabilities	78,~~525~~132		78,~~055~~210
Deferred tax liability	32,~~652~~851		42,~~374~~643
Accrued long-term retirement benefits	2729,~~346~~418		2827,~~413~~379
Long-term deferred revenue and customer deposits	~~127~~151,~~070~~842		~~130~~147,~~212~~510
Operating lease liabilities, net of current portion	3130,~~798~~650		3832,~~101~~509
Long-term debt	75,000		100,000
Total liabilities	609,875		626,183
Total liabilities	654,162		703,237
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, $0.001 par value:
Preferred stock, $0.001 par value:5,000,000 shares authorized; no shares issued or outstanding at June 30, 2025 and March 31, 2025	—		—
5,000,000 shares authorized; no shares issued or outstanding at December 31, 2024 and March 31, 2024	—		—
Common stock, $0.001 par value:300,000,000 shares authorized; 135,857,091 and 134,038,262 shares issued and 72,520,702 and 72,060,237 shares outstanding at June 30, 2025 and March 31, 2025, respectively	135		134
Common stock, $0.001 par value:
Additional paid-in capital	3,274,682		3,255,333
300,000,000 shares authorized; 133,718,142 and 131,316,309 shares issued and 71,745,945 and 71,404,216 shares outstanding at December 31, 2024 and March 31, 2024, respectively	133		131
Accumulated other comprehensive income	4,337		4,073
Additional paid-in capital	3,234,959		3,181,366
Treasury stock at cost, 63,336,389 and 61,978,025 shares at June 30, 2025 and March 31, 2025, respectively	(1,683,481)		(1,654,702)
Accumulated other comprehensive income	3,120		3,572
Accumulated deficit	(48,122)		(44,443)
Treasury stock at cost, 61,972,197 and 59,912,093 shares at December 31, 2024 and March 31, 2024, respectively	(1,654,569)		(1,615,483)
Total stockholders' equity	1,547,551		1,560,395
(Accumulated deficit) retained earnings	(63,060)		322,479
Total liabilities and stockholders' equity	$	2,157,426	$	2,186,578
Total stockholders' equity	1,520,583		1,892,065
Total liabilities and stockholders' equity	$	2,174,745	$	2,595,302

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

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Operations

(In thousands, except for per share data)

(Unaudited)

	Three Months Ended				~~Nine Months Ended~~
	December 31,				December 31,
	June 30,
	2024		2023		2024		2023
	2025		2024
Revenue:
Product	$	~~128~~72,~~175~~993	$	9561,~~832~~169	$	~~270,377~~	$	~~271,038~~
Service	~~123~~113,~~844~~754		~~122~~113,~~240~~396		~~347,315~~		~~354,974~~
Total revenue	~~252~~186,~~019~~747		~~218~~174,~~072~~565		~~617,692~~		~~626,012~~
Cost of revenue:
Product	1611,~~362~~925		1512,~~251~~004		~~41,806~~		~~48,006~~
Service	3031,~~250~~497		2832,~~373~~365		~~91,232~~		~~89,066~~
Total cost of revenue	4643,~~612~~422		4344,~~624~~369		~~133,038~~		~~137,072~~
Gross profit	~~205~~143,~~407~~325		~~174~~130,~~448~~196		~~484,654~~		~~488,940~~
Operating expenses:
Research and development	3739,~~753~~789		3742,~~023~~465		~~116,127~~		~~117,655~~
Sales and marketing	6970,~~933~~595		6970,~~124~~330		~~201,489~~		~~209,070~~
General and administrative	2327,~~484~~857		2325,~~109~~581		~~72,807~~		~~73,975~~
Amortization of acquired intangible assets	11,~~601~~119		1211,~~533~~614		~~34,857~~		~~37,790~~
Restructuring charges	~~923~~529		—16,563		~~19,895~~		—
Goodwill impairment	—		~~167~~426,~~106~~967		~~426,967~~		~~167,106~~
Gain on divestiture of a business	—		—		—		(3,806)
Total operating expenses	149,889		593,520
Total operating expenses	143,694		308,895		872,142		601,790
Loss from operations	(6,564)		(463,324)
Income (loss) from operations	61,713		(134,447)		(387,488)		(112,850)
Interest and other income (expense), net:
Interest income	23,~~533~~211		23,~~145~~098		~~8,177~~		~~6,942~~
Interest expense	(~~2,649~~415)		(21,~~208~~945)		~~(6,395)~~		~~(6,475)~~
Other income (expense), net	~~(4,222)~~940		~~792~~8,475		~~1,711~~		~~805~~
Total interest and other income (expense), net	(43,~~338)~~736		~~729~~9,628		~~3,493~~		~~1,272~~
Income (loss) before income tax expense (benefit)	57,375		(133,718)		(383,995)		(111,578)
Loss before income tax expense (benefit)	(2,828)		(453,696)
Income tax expense (benefit)	~~8,565~~851		(110,~~141~~320)		~~1,544~~		~~3,737~~
Net income (loss)	$	48,810	$	(132,577)	$	(385,539)	$	(115,315)
Net loss	$	(3,679)	$	(443,376)
Basic net income (loss) per share	$	0.68	$	(1.87)	$	(5.39)	$	(1.61)
Basic net loss per share	$	(0.05)	$	(6.20)
Diluted net income (loss) per share	$	0.67	$	(1.87)	$	(5.39)	$	(1.61)
Diluted net loss per share	$	(0.05)	$	(6.20)
Weighted average common shares outstanding used in computing:
Net income (loss) per share - basic	71,737		71,077		71,551		71,577
Net loss per share - basic	71,729		71,467
Net income (loss) per share - diluted	72,569		71,077		71,551		71,577
Net loss per share - diluted	71,729		71,467

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

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Comprehensive ~~Income (~~Loss)

(In thousands)

(Unaudited)

	Three Months Ended				~~Nine Months Ended~~
	December 31,				December 31,
	June 30,
	2024		2023		2024		2023
	2025		2024
Net income (loss)	$	48,810	$	(132,577)	$	(385,539)	$	(115,315)
Net loss	$	(3,679)	$	(443,376)
Other comprehensive income (loss):
Cumulative translation adjustments	~~(678)~~143		~~216~~(131)		~~(281)~~		~~146~~
Changes in market value of investments:
Changes in unrealized (losses) gains, net of (benefit) taxes of ($1), $18, $8 and ($13), respectively	(2)		57		26		(40)
Changes in unrealized (losses) gains, net of taxes of $0 and $2, at June 30, 2025 and 2024, respectively	(1)		7
Total net change in market value of investments	(21)		577		26		~~(40)~~
Changes in market value of derivatives:
Changes in market value of derivatives, net of (benefit) taxes of ($139), $62, ($100), and $26, respectively	(437)		188		(318)		84
Changes in market value of derivatives, net of taxes (benefit) of $78 and ($27), at June 30, 2025 and 2024, respectively	252		(90)
Reclassification adjustment for net gains (losses) included in net income (loss), net of taxes (benefits) of $28, $9, $38, and ($18), respectively	86		30		121		(58)
Reclassification adjustment for net (losses) gains included in net loss, net of (benefits) taxes of ($40) and $14, at June 30, 2025 and 2024, respectively	(130)		46
Total net change in market value of derivatives	~~(351)~~122		~~218~~(44)		~~(197)~~		26
Other comprehensive income (loss)	~~(1,031)~~264		~~491~~(168)		~~(452)~~		~~132~~
Total comprehensive income (loss)	$	47,779	$	(132,086)	$	(385,991)	$	(115,183)
Total comprehensive loss	$	(3,415)	$	(443,544)

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

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands, except for per share data)

(Unaudited)

	Three Months Ended December 31, 2024
	Three Months Ended June 30, 2025
	Common StockVoting			AdditionalPaid InCapital		AccumulatedOtherComprehensiveIncome		Treasury Stock			(Accumulated Deficit~~) Retained Earnings~~		TotalStockholders'Equity
	Shares	ParValue						Shares	StatedValue
Balance, September 30, 2024	133,671,490	$	133	$	3,221,213	$	4,151	61,956,261	$	(1,654,239)	$	(111,870)	$	1,459,388
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											48,810		48,810
Net loss											(3,679)		(3,679)
Unrealized net investment losses						(21)							(21)
Unrealized net losses on derivative financial instruments						(351)							(351)
Unrealized net gains on derivative financial instruments						122							122
Cumulative translation adjustments						~~(678)~~143							~~(678)~~143
Issuance of common stock pursuant to vesting of restricted stock units	461,~~652~~818,829	—1											—1
Stock-based compensation expense for restricted stock units granted to employees				1319,~~746~~349									1319,~~746~~349
Repurchase of treasury stock								151,~~936~~358,364	(~~330~~28,779)				(~~330~~28,779)
Balance, December 31, 2024	133,718,142	$	133	$	3,234,959	$	3,120	61,972,197	$	(1,654,569)	$	(63,060)	$	1,520,583
Balance, June 30, 2025	135,857,091	$	135	$	3,274,682	$	4,337	63,336,389	$	(1,683,481)	$	(48,122)	$	1,547,551

	Nine Months Ended December 31, 2024
	Three Months Ended June 30, 2024
	Common StockVoting			AdditionalPaid InCapital		AccumulatedOtherComprehensiveIncome		Treasury Stock			Retained Earnings (Accumulated Deficit) ~~Retained Earnings~~		TotalStockholders'Equity
	Shares	ParValue						Shares	StatedValue
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											(~~385~~443,~~539~~376)		(~~385~~443,~~539~~376)
Unrealized net investment gains						267							267
Unrealized net losses on derivative financial instruments						(~~197~~44)							(~~197~~44)
Cumulative translation adjustments						(~~281~~131)							(~~281~~131)
Issuance of common stock pursuant to vesting of restricted stock units	21,~~188~~872,~~735~~919	2											2
Stock-based compensation expense for restricted stock units granted to employees				4920,~~016~~632									4920,~~016~~632
Issuance of common stock under employee stock purchase plan	213,098			4,577									4,577
Repurchase of treasury stock								1,965,726	(37,159)				(37,159)
Repurchase of treasury stock								2,060,104	(39,086)				(39,086)
Balance, June 30, 2024	133,189,228	$	133	$	3,201,998	$	3,404	61,877,819	$	(1,652,642)	$	(120,897)	$	1,431,996
Balance, December 31, 2024	133,718,142	$	133	$	3,234,959	$	3,120	61,972,197	$	(1,654,569)	$	(63,060)	$	1,520,583

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

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands, except share data)

(Unaudited)

	Three Months Ended December 31, 2023
	Common StockVoting			AdditionalPaid InCapital		AccumulatedOtherComprehensiveIncome		Treasury Stock			Retained Earnings		TotalStockholders'Equity
	Shares	ParValue						Shares	StatedValue
Balance, September 30, 2023	130,875,398	$	130	$	3,142,712	$	5,379	59,177,497	$	(1,596,026)	$	487,475	$	2,039,670
Net loss											(132,577)		(132,577)
Unrealized net investment gains						57							57
Unrealized net gains on derivative financial instruments						218							218
Cumulative translation adjustments						216							216
Issuance of common stock pursuant to vesting of restricted stock units	47,079	1											1
Stock-based compensation expense for restricted stock units granted to employees				15,571									15,571
Repurchase of treasury stock				—				725,076	(19,253)				(19,253)
Balance, December 31, 2023	130,922,477	$	131	$	3,158,283	$	5,870	59,902,573	$	(1,615,279)	$	354,898	$	1,903,903

	Nine Months Ended December 31, 2023
	Common StockVoting			AdditionalPaid InCapital		AccumulatedOtherComprehensiveIncome		Treasury Stock			Retained Earnings		TotalStockholders'Equity
	Shares	ParValue						Shares	StatedValue
Balance, March 31, 2023	128,683,824	$	128	$	3,099,698	$	5,738	57,434,779	$	(1,546,128)	$	470,213	$	2,029,649
Net loss											(115,315)		(115,315)
Unrealized net investment losses						(40)							(40)
Unrealized net gains on derivative financial instruments						26							26
Cumulative translation adjustments						146							146
Issuance of common stock pursuant to vesting of restricted stock units	2,028,862	3											3
Stock-based compensation expense for restricted stock units granted to employees				52,579									52,579
Issuance of common stock under employee stock purchase plan	209,791			6,006									6,006
Repurchase of treasury stock				—				2,467,794	(69,151)				(69,151)
Balance, December 31, 2023	130,922,477	$	131	$	3,158,283	$	5,870	59,902,573	$	(1,615,279)	$	354,898	$	1,903,903

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

Table of Contents

NetScout Systems, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	Three Months Ended
	December 31,
	June 30,
	2024		2023
	2025		2024
Cash flows from operating activities:
Net loss	$	(~~385~~3,~~539~~679)	$	(~~115~~443,~~315~~376)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	4814,~~190~~457		5616,~~928~~405
Loss on extinguishment of debt	1,134		—
Operating lease right-of-use asset amortization	2,497		2,606
Operating lease right-of-use asset amortization	7,852		7,857
Loss on disposal of fixed assets	5		—
Gain on divestiture of a business	—		(3,806)
Share-based compensation expense	19,959		21,198
Loss on disposal of fixed assets	15		299
Goodwill impairment	—		426,967
Share-based compensation expense	50,586		54,653
Deferred income taxes	(6,432)		(17,077)
Change in fair value of derivative investment	—		(206)
Gain in equity investment	(2,490)		(8,839)
Goodwill impairment	426,967		167,106
Deferred income taxes	(32,248)		(35,530)
Other gains	(2,947)		(1,758)
Changes in assets and liabilities
Accounts receivable and unbilled costs	~~(22~~71,~~374)~~804		~~(77~~62,~~787)~~715
Inventories and deferred costs	(1,~~460~~053)		(~~634~~1,567)
Prepaid expenses and other assets	6(1,~~688~~183)		(64,~~583)~~152
Accounts payable	(~~485~~3,752)		~~(984)~~1,686
Accrued compensation and other expenses	9(10,~~158~~116)		~~(46~~8,~~170)~~740
Operating lease liabilities	(92,~~274~~974)		(83,~~970~~022)
Income taxes payable	~~(296)~~492		(~~2,631~~65)
Deferred revenue	(193,~~818~~983)		(2132,~~236~~095)
Net cash provided by (used in) operating activities	76,149		(34,767)
Net cash provided by operating activities	73,552		38,428
Cash flows from investing activities:
Purchase of marketable securities and investments	(29,~~348~~031)		(4312,~~159~~151)
Proceeds from sales and maturity of marketable securities	3613,~~688~~618		5310,~~569~~325
Purchase of fixed assets	(41,~~009~~878)		(41,~~747~~268)
Purchase of intangible assets	(1,290)		—
Net cash used in investing activities	(17,291)		(3,094)
Proceeds from divestiture of a business	—		7,766
Net cash provided by investing activities	2,041		13,429
Cash flows from financing activities:
Issuance of common stock under stock plans	21		32
Treasury stock repurchases	(2515,~~257~~014)		(5025,000)
Tax withholding on restricted stock units	(13,~~829~~765)		(1912,~~151~~159)
Payment of debt issuance costs	(2,450)		—
Repayment of long-term debt	—		(25,000)
Repayment of long-term debt	(100,000)		—
Net cash used in financing activities	(28,778)		(62,157)
Proceeds from issuance of long-term debt	75,000		—
Effect of exchange rate changes on cash and cash equivalents	4,674		(638)
Net cash used in financing activities	(66,534)		(69,148)
Net increase (decrease) in cash and cash equivalents	32,157		(27,461)
Effect of exchange rate changes on cash and cash equivalents	(2,969)		1,347
Cash and cash equivalents, beginning of period	457,415		389,674
Net increase (decrease) in cash and cash equivalents	8,687		(89,139)
Cash and cash equivalents, end of period	$	489,572	$	362,213
Cash and cash equivalents, beginning of period	389,674		386,794
Cash and cash equivalents, end of period	$	398,361	$	297,655
Supplemental disclosures:
Cash paid for interest	$	~~3,793~~—	$	41,~~817~~437
Cash paid for income taxes	$	328,~~197~~530	$	549,~~481~~143
Non-cash transactions:
Transfers of inventory to fixed assets	$	~~1,020~~476	$	~~1,814~~645
Additions to property, plant and equipment included in accounts payable	$	~~318~~457	$	~~414~~253
Issuance of common stock under employee stock plans	$	4,577	$	6,006

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

Table of Contents

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, ~~2024~~2025 filed with the ~~Securities~~SEC ~~and Exchange Commission~~ on May 1615, ~~2024~~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) 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 ~~macroeconomic~~Company ~~environment~~ remains ~~challenging~~cautiously ~~with~~optimistic amid ongoing macroeconomic uncertainty and constrained customer spending ~~and~~in the ~~Company~~service ~~expects~~provider ~~this~~market toand ~~persist~~remains ~~for~~firmly ~~the~~focused ~~remainder~~on ofdriving ~~fiscal~~product ~~year~~innovation, ~~2025.~~returning ~~The~~to ~~Company~~annual ~~has~~revenue ~~taken~~growth, and ~~continues~~enhancing tomargins ~~take~~through ~~precautionary~~continued ~~actions~~disciplined tocost ~~manage~~management ~~costs~~as ~~and~~it ~~increase~~navigates ~~productivity across~~ the ~~organization.~~current ~~This~~macroeconomic ~~includes~~landscape ~~managing~~that ~~discretionary~~may ~~spending~~persist ~~and~~through ~~hiring~~fiscal ~~activities,~~year in2026. In addition to aits ~~voluntary~~cash, ~~separation~~cash ~~program~~equivalents, ~~enacted~~marketable securities, and ~~substantially completed in the first half of fiscal year 2025. Further~~investments, based on covenant levels, ~~the Company had~~ as of ~~December~~June 3130, ~~2024~~2025, anthe ~~incremental~~Company had $~~525~~600 million available under ~~the~~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 ~~statement~~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 ~~NetScout~~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 ~~decision~~ 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 ~~retrospectively~~ for ~~fiscal~~annual ~~years~~periods beginning after December ~~15, 2024. The amendments should be applied prospectively; however, retrospective application is also permitted. ASU 2023-09 is~~

Table of Contents

~~effective~~15, ~~for~~2024. ~~NetScout~~The ~~beginning~~amendments ~~April~~should 1,be ~~2025.~~applied ~~Early~~prospectively; ~~adoption~~however, retrospective application is also permitted. The Company is in the process of evaluating the impact ~~that~~ the adoption of ASU 2023-09 will have toon ~~the~~its ~~financial~~income ~~statements~~tax ~~and related~~ disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. The Company plans to adopt ASU 2023-07 beginning with its fiscal year ending March 31, 2025. The Company is in the process of evaluating the impact that the adoption ASU 2023-07 will have to the financial statements and related 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 of software only offerings and offerings which include hardware appliances with embedded software that 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 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

Table of Contents

selling price the performance obligation was recently sold for, 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 ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, the Company recognized revenue of $~~253~~97.30 million related to the Company's deferred revenue balance reported at March 31, ~~2024~~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 ~~December~~June 3130, ~~2024~~2025.

At ~~December~~June 3130, ~~2024~~2025, the Company had total deferred revenue and customer deposits of $~~411~~445.98 million, which represents the aggregate total contract price allocated to undelivered performance obligations. The Company expects to recognize $~~284~~293.89 million, or 6966%, of this revenue during the next 12 months, and expects to recognize the remaining $~~127~~151.19 million, or 3134%, of this revenue thereafter.

~~Because~~In ofaccordance ~~NetScout's~~with our revenue recognition policies, there are circumstances for which the Company does not recognize revenue relating to sales transactions that have been billed, ~~but~~and the related ~~account~~invoiced ~~receivable~~amount has not been collected. While the ~~receivable~~invoiced amount represents an enforceable obligation, the Company does not believe its right to payment is unconditional. Therefore, ~~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 $123.0 million and $5.95 million at ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025, respectively.

~~NetScout~~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 ~~nine~~three months ended ~~December~~June 3130, ~~2024~~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 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.

Table of Contents

Costs to Obtain Contracts

The Company has determined that the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 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 ~~December~~June 3130, ~~2024~~2025, the consolidated balance sheet included $910.60 million in assets related to sales commissions to be expensed in future periods. A balance of $5.25 million was included in prepaid expenses and other current assets, and a balance of $4.4 million was included in other assets in the Company's consolidated balance sheet at December 31, 2024. At March 31, 2024, the consolidated balance sheet included $9.3 million in assets related to sales commissions to be expensed in future periods. A balance of $4.8 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, 2024.

During the three and nine months ended December 31, 2024 and 2023, respectively, the Company recognized $1.8 million, $1.7 million, $5.2 million and $5.1 million of amortization related to this sales commission asset, which is included in the sales and marketing expense line in the Company's consolidated statements of operations.9

Table of Contents

of $4.5 million was included in other assets in the Company's consolidated balance sheet at June 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 months ended June 30, 2025 and 2024, the Company recognized $1.9 million and $1.7 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, 2024	$	479
Balance at March 31, 2025	$	214
Additions resulting in charges to operations	4948
Recoveries of previously reserved balances	(~~430~~10)
Deductions due to write-offs	(13160)
Balance at December 31, 2024	$	85
Balance at June 30, 2025	$	92

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 ~~December 31,~~each ~~2024, the Company had one direct customer, Verizon, over 10%~~ of ~~the accounts receivable balance~~June 30, ~~while~~2025 noand ~~channel partners accounted for more than 10% of the accounts receivable balance. At~~ March 31, ~~2024~~2025, the Company had no direct customers or channel partners ~~which~~that accounted for more than 10% of the accounts receivable balance.

During each of the three ~~and nine~~ months ended ~~December~~June 3130, ~~2024~~2025, ~~one~~and ~~direct customer~~2024, ~~Verizon, accounted for more than 10% of~~ the Company's ~~total~~had ~~revenue, while~~ no ~~channel partners accounted for more than 10% of total revenue. During the three and nine months ended December 31,2023, 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 ~~doubtful~~credit ~~accounts~~losses.

NOTE 4 – SHARE-BASED COMPENSATION

On September 12, 2019, the Company's stockholders approved the 2019 Equity Incentive Plan (2019 Plan), which replaced the Company's 2007 Equity Incentive Plan, as amended (Amended 2007 Plan). The 2019 Plan permits the granting of incentive and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards, collectively referred to as "share-based awards.".

On September 10, 2020, the Company's stockholders approved an amendment and restatement of the 2019 Equity Incentive Plan (2019 First Amended Plan) to increase the number of shares reserved for issuance by 4,700,000 shares, establish a one-year minimum vesting requirement for awards granted on or after September 10, 2020, and change the "fungible share counting ratio used to calculate the increase or reduction in the number of shares available for issuance under the 2019 First Amended Plan.

11On August 24, 2022, the Company's stockholders approved an amendment and restatement of the 2019 Equity Incentive Plan (2019 Second Amended Plan) to increase the number of shares reserved for issuance by 7,000,000 shares, and change the fungible share counting ratio used to calculate the increase or reduction in the number of shares available for issuance under the 2019 Second Amended Plan.

On September 14, 2023, the Company's stockholders approved an amendment and restatement to the 2019 First Amended Plan (2019 Third Amended Plan) to further increase the number of shares reserved for issuance by 5,900,000 shares and changed the fungible share counting ratio used to calculate the increase or reduction in the number of shares available for issuance under the 2019 Third Amended Plan.

Table of Contents

~~counting~~On ~~ratio"~~September ~~used~~12, to2024, ~~calculate~~the Company's stockholders approved an amendment and restatement to the ~~increase~~2019 orFirst ~~reduction~~Amended inPlan (2019 Fourth Amended Plan) to further increase the number of shares ~~available~~reserved for issuance by 3,400,000. At September 12, 2024, the effective date of the 2019 Fourth Amended Plan, there was a total of 7,947,545 shares reserved for issuance under the 2019 Fourth Amended Plan, which consisted of 3,400,000 new shares plus 4,547,545 shares that remained available for grant under the 2019 Third Amended Plan. The Company refers to the 2019 Plan, 2019 First Amended Plan, 2019 Second Amended Plan, 2019 Third Amended Plan and 2019 Fourth Amended Plan collectively as the "Amended 2019 Plan". As of June 30, 2025, an aggregate of 4,484,849 shares remained available for grant under the Amended 2019 Plan.

OnPeriodically, ~~August~~the 24Company grants share-based awards to employees, ~~2022~~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 vest based upon the Company's ~~stockholders~~total ~~approved~~shareholder anreturn ~~amendment~~as ~~and~~compared ~~restatement~~to of the ~~2019~~Russell ~~Equity~~2000 ~~Incentive~~Index ~~Plan~~over ~~(2019~~a ~~Second~~three-year ~~Amended~~period. ~~Plan)~~The toperformance-based ~~increase~~restricted stock units are valued using the ~~number~~Monte Carlo Simulation model. The measurement and recognition of ~~shares~~compensation ~~reserved~~expense is based on estimated fair values for ~~issuance~~all byshare-based ~~7,000,000~~payment ~~shares,~~awards made to its employees and ~~change~~directors. ~~the~~Share-based ~~"fungible~~award ~~share~~grants ~~counting~~are ~~ratio"~~generally ~~used~~measured toat ~~calculate~~fair value on the ~~increase~~date orof ~~reduction~~grant inbased on the number of shares ~~available~~granted ~~for~~and ~~issuance~~the ~~under~~quoted ~~the~~price ~~2019~~of ~~Second~~the ~~Amended~~Company's ~~Plan~~common stock. Such value is recognized as a cost of revenue or an operating expense over the corresponding vesting period.

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 2007 Plan and the Amended 2019 Plan, and employee stock purchases made under the Company's 2011 Amended and Restated Employee Stock Purchase Plan (ESPP), based on estimated fair values within the applicable cost and expense lines identified below (in thousands):

On September 14, 2023, the Company's stockholders approved an amendment and restatement to the 2019 First Amended Plan (2019 Third Amended Plan) to further increase the number of shares reserved for issuance by 5,900,000 shares and changed the "fungible share counting ratio" used to calculate the increase or reduction in the number of shares available for issuance under the 2019 Third Amended Plan.


	Three Months Ended
	June 30,
	2025		2024
Cost of product revenue	$	413	$	431
Cost of service revenue	2,747		2,889
Research and development	5,532		5,886
Sales and marketing	6,889		7,504
General and administrative	4,378		4,488
	$	19,959	$	21,198

Employee OnStock ~~September~~Purchase ~~12,~~Plan ~~2024,~~– ~~the~~The Company’s ~~stockholders~~maintains ~~approved~~the anESPP ~~amendment~~for ~~and~~all ~~restatement~~eligible toemployees ~~the~~as ~~2019~~described ~~First~~in ~~Amended~~the ~~Plan~~Company's ~~(2019~~Annual ~~Fourth~~Report ~~Amended~~on ~~Plan)~~Form to10-K ~~further~~for ~~increase~~ the ~~number~~fiscal ofyear ~~shares~~ended ~~reserved for issuance by 3~~March 31,~~400,000~~ 2025. At ~~September~~Under ~~12,~~the ~~2024~~ESPP, ~~the~~shares ~~effective date~~ of the ~~2019~~Company's ~~Fourth~~common ~~Amended~~stock ~~Plan,~~may ~~there~~be ~~was~~purchased aon ~~total of 7,947,545 shares reserved for issuance under~~ the ~~2019~~last ~~Fourth~~day ~~Amended Plan, which consisted~~ of ~~3,400,000~~each ~~new~~bi-annual ~~shares~~offering ~~plus~~period ~~4,547,545~~at ~~shares~~85% ~~that~~of ~~remained available for grant under~~ the ~~2019~~fair ~~Third~~value ~~Amended~~on ~~Plan. The Company refers to~~ the ~~2019~~last ~~Plan,~~day ~~2019~~of ~~First~~such ~~Amended~~offering ~~Plan,~~period. ~~2019~~The ~~Second~~offering ~~Amended~~periods ~~Plan,~~run ~~2019~~from ~~Third~~March 1st ~~Amended~~through ~~Plan~~August 31st and ~~2019~~from ~~Fourth~~September 1st ~~Amended~~through ~~Plan collectively as~~ the ~~"Amended~~last ~~2019~~day ~~Plan".~~of ~~At December~~February ~~31,~~each ~~2024, an aggregate of 8,148,350 shares remained available for grant under the Amended 2019 Plan~~year.

Periodically, the Company grants share-based awards to employees, officers, and directors of the Company and its subsidiaries. Additionally, the Company periodically grants performance-based restricted stock units to certain executive officers that vest based upon the Company's total shareholder return as compared to the Russell 2000 Index over a three-year period. The performance-based restricted stock units are valued using the Monte Carlo Simulation model. The measurement and recognition of compensation expense is based on estimated fair values for all share-based payment awards made to its employees and directors. Share-based award grants are generally measured at fair value on the date of grant based on the number of shares granted and the quoted price of the Company's common stock. Such value is recognized as a cost of revenue or an operating expense over the corresponding vesting period.

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Cost of product revenue	$	287	$	306	$	1,013	$	1,027
Cost of service revenue	1,909		2,069		6,703		6,897
Research and development	4,074		4,498		13,894		14,872
Sales and marketing	5,071		5,680		17,850		19,639
General and administrative	3,161		3,811		11,126		12,218
	$	14,502	$	16,364	$	50,586	$	54,653

Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company's Annual Report on Form 10-K for the year ended March 31, 2024. Under the ESPP, shares of the Company's common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair 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 nine months ended December 31, 2024, employees purchased 213,098 shares under the ESPP and the fair value per share was $21.48.

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 equivalents mainly consisted of U.S. government and municipal obligations, commercial paper, money market instruments and cash maintained with various financial institutions at ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025.

1211

Table of Contents

Marketable Securities

The following is a summary of marketable securities held by NetScout at ~~December~~June 3130, ~~2024~~2025, classified as short-term and long-term (in thousands):

	AmortizedCost		~~UnrealizedLosses~~Unrealized(Losses) Gains		FairValue
Type of security:
U.S. government and municipal obligations	$	~~987~~5,957	$	—(1)	$	~~987~~5,956
Commercial paper	1318,~~130~~525		—		1318,~~130~~525
Certificates of deposit	510		—		510
Corporate bonds	997		(1)		996
Total short-term marketable securities	14,627		—		14,627
Certificates of deposit	1,263		—		1,263
U.S. government and municipal obligations	1,016		(1)		1,015
Agency bonds	955		—		955
Total long-term marketable securities	1,016		(1)		1,015
Total short-term marketable securities	27,697		(2)		27,695
Total marketable securities	$	15,643	$	(1)	$	15,642
U.S. government and municipal obligations	976		2		978
Corporate bonds	10,019		—		10,019
Total long-term marketable securities	10,995		2		10,997
Total marketable securities	$	38,692	$	—	$	38,692

The following is a summary of marketable securities held by NetScout at March 31, ~~2024~~2025, classified as short-term and long-term (in thousands):

AmortizedCost

~~UnrealizedLosses~~Unrealized Gains (Losses)

FairValue

Type of security:

U.S. government and municipal obligations

104,~~523~~413

~~(26)~~1

104,~~497~~414

Commercial paper

817,~~648~~358

—

817,~~648~~358

Certificates of deposit

~~2,807~~505

—

~~2,807~~505

Total short-term marketable securities

2122,~~978~~276

~~(26)~~1

2122,~~952~~277

U.S. government and municipal obligations

1,~~004~~005

(101)

~~994~~1,004

Total long-term marketable securities

1,~~004~~005

(101)

~~994~~1,004

Total marketable securities

2223,~~982~~281

~~(36)~~—

2223,~~946~~281

Contractual maturities of the Company's marketable securities held at ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025 were as follows (in thousands):

	December 31,2024		March 31,2024
	June 30,2025		March 31,2025
Available-for-sale securities:
Due in 1 year or less	$	1427,~~627~~695	$	2122,~~952~~277
Due after 1 year through 5 years	110,~~015~~997		~~994~~1,004
	$	1538,~~642~~692	$	2223,~~946~~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 and recorded a $0.2 million change in the fair value of the derivative instrument in other income (expense), net within the Company's consolidated statement of operations during the ~~nine~~three months ended ~~December~~June 3130, 2023. As part of the agreement, the Company received the right to designate a representative to be nominated for election to the Napatech Board of Directors, which was approved by Napatech's Nomination Committee in April 2023. Subsequently in April 2025, the Company's representative to the Napatech Board resigned. As a result, the Company no longer holds a Board seat. The Company accounts for this investment under the equity method and has elected to apply the fair value option to the investment. The Company records 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 income (expense), net within the Company's consolidated statement of operations. At December 31, 2024 and March 31, 2024, the fair value of the investment in Napatech was $13.9 million and $11.5 million, respectively, and was included in marketable securities and investments in the Company's consolidated balance sheet. During the nine months ended December 31, 2024 and 2023, the Company recognized a $2.9 million gain and a $1.8 million gain, respectively, in the fair value of the equity investment in

1312

Table of Contents

other income (expense), net within the Company's consolidated statement of operations. At June 30, 2025 and March 31, 2025, the fair value of the investment in Napatech was $15.2 million and $11.8 million, respectively, and was included in marketable securities and investments in the Company's consolidated balance sheet. During the three months ended June 30, 2025 and 2024, the Company recognized a $2.5 million gain and an $8.8 million gain, respectively, due to changes in the fair value of the equity investment in Napatech in other income (expense), net within the Company's consolidated statement of operations. For the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, the unrealized ~~loss~~gain related to foreign currency translation on the equity investment in Napatech was $01.50 million. For the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024, the unrealized gain related to foreign currency translation on the equity investment in Napatech was immaterial.

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 ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025 (in thousands):

	Fair Value Measurements at
	December 31, 2024
	June 30, 2025
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash and cash equivalents	$	~~373~~458,~~633~~997	$	2430,~~728~~575	$	—	$	~~398~~489,~~361~~572
U.S. government and municipal obligations	26,~~002~~934		—		—		26,~~002~~934
Commercial paper	—		1318,~~130~~525		—		1318,~~130~~525
Certificates of deposit	—		510		—		510
Corporate bonds			996		—		996
Equity investment in Napatech	13,909		—		—		13,909
Certificates of deposit	—		1,263		—		1,263
	$	389,544	$	38,368	$	—	$	427,912
Equity investment in Napatech	15,241		—		—		15,241
Derivative financial instruments			318		—		318
Agency bonds			10,974		—		10,974
	$	481,172	$	62,651	$	—	$	543,823
LIABILITIES:
Derivative financial instruments	$	—	$	(~~324~~28)	$	—	$	(~~324~~28)
	$	—	$	(~~324~~28)	$	—	$	(~~324~~28)

	Fair Value Measurements at
	March 31, 2024
	March 31, 2025
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash and cash equivalents	$	~~381~~434,~~829~~121	$	723,~~845~~294	$	—	$	~~389~~457,~~674~~415
U.S. government and municipal obligations	83,~~985~~008		2,~~506~~410		—		115,~~491~~418
Commercial paper	—		817,~~648~~358		—		817,~~648~~358
Certificates of deposit	—		~~2,807~~505		—		~~2,807~~505
Equity investment in Napatech	11,~~507~~781		—		—		11,~~507~~781
Derivative financial instruments	—		11197		—		11197
	$	~~402~~448,~~321~~910	$	2143,~~817~~764	$	—	$	~~424~~492,~~138~~674
LIABILITIES:
Derivative financial instruments	$	—	$	(7455)	$	—	$	(7455)
	$	—	$	(7455)	$	—	$	(7455)

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.

Table of Contents

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.

Table of Contents

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):

	December 31,2024		March 31,2024
	June 30,2025		March 31,2025
Raw materials	$	6,~~540~~882	$	87,~~175~~172
Work in process	~~786~~22		~~545~~47
Finished goods	34,~~830~~300		43,~~160~~890
Deferred costs	31,~~258~~843		1,~~215~~782
	$	1413,~~414~~047	$	1412,~~095~~891

NOTE 8 -– ~~DIVESTITURES~~GOODWILL AND INTANGIBLE ASSETS

Business Divestiture

On September 8, 2023, the Company entered into an Asset Purchase Agreement to divest its Test Optimization business (TO Business) for a purchase price of $7.8 million, inclusive of a working capital adjustment. The Company recorded a gain of $3.8 million on the divestiture during the nine months ended December 31, 2023.

The Company determined that the sale of the TO Business did not represent a strategic shift and will not have a major effect on its consolidated results of operations, financial position or cash flow. Accordingly, the Company has not presented the sale as a discontinued operation in the consolidated financial statements.

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

~~The~~During ~~Company~~the ~~has~~first ~~one~~quarter ~~reporting~~of ~~unit.~~fiscal ~~Goodwill~~year is2025, ~~tested~~due ~~for~~to ~~impairment~~a atdecrease ain ~~reporting~~the ~~unit~~Company's ~~level~~stock atprice ~~least~~and ~~annually~~overall market capitalization, asalong ofwith ~~January~~other ~~31,~~qualitative orconsiderations onincluding anthe ~~interim~~continued ~~basis~~impact iffrom anthe ~~event~~conditions ~~occurs~~in orthe ~~circumstances~~macroeconomic ~~change~~environment, (it was determined a "Triggering Event") ~~that~~occurred, ~~would~~indicating goodwill may be impaired. Accordingly, ~~more~~the ~~likely~~Company ~~than~~conducted ~~not~~an interim quantitative impairment test of its goodwill at June 30, ~~reduce~~2024 using the market approach to estimate the fair value of ~~the~~its reporting unit. ~~below~~As ~~its~~a ~~carrying~~result ~~value~~of that interim impairment test, the Company recorded a $427. 0 million goodwill impairment charge during the three months ended June 30, 2024.

During fiscal year 2024, the Company recorded $217.3 million in goodwill impairment charges as a result of the sustained decline in the Company's stock price and overall market capitalization. During the first quarter of fiscal year 2025, ~~due to~~ the ~~continued decrease in the~~ Company's ~~stock~~completed ~~price~~its ~~and~~annual 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 a quantitative~~ impairment test ~~of its goodwill~~ at ~~June~~January 3031, ~~2024.~~2025, ~~The Company estimated the implied fair value of its goodwill~~ using ~~a market approach. As a result of~~ the ~~quantitative~~qualitative ~~impairment test performed during the first quarter of fiscal year 2025~~assessment, ~~the Company determined goodwill was impaired~~ and ~~recorded a goodwill impairment charge of $427.0 million during~~ the ~~three~~Company ~~months~~concluded ~~ended~~that ~~June~~it ~~30, 2024. The additional impairment charge recorded in the first quarter of fiscal year 2025~~ was ~~primarily~~more ~~due~~likely tothan ~~the~~not ~~continued decrease in the Company's stock price from March 31, 2024 to June 30, 2024, an increase in the Company's weighted-average cost of capital, and the refinement to the expected cost synergies~~ that ~~could be realized by a hypothetical buyer as a result of~~ the ~~voluntary separation program (VSP) implemented by the Company in the first quarter of fiscal year 2025, which impacted the company-specific control premium used to determine the~~ fair value of the reporting unit ~~under~~exceeded ~~the~~its ~~market~~carrying ~~approach~~value. ~~At September 30, 2024 and December 31, 2024, the Company performed a Triggering Event assessment and concluded no events or circumstances occurred that indicated goodwill was further impaired.~~

~~Throughout the remainder of the fiscal year 2025, the Company will continue to monitor relevant facts and circumstances, including future changes in its stock price.~~ 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 ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025, the carrying amounts of goodwill were $1.1 billion ~~and $1.5 billion~~, respectively. The change in the carrying amount of goodwill for the nine months ended December 31, 2024 was due to the impairment of goodwill, and the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar.

15The following table summarizes the changes in the carrying amount of goodwill for the three months ended June 30, 2025 as follows (in thousands):

Table of Contents


Balance at March 31, 2025	$	1,076,383


Foreign currency translation impact	(6,228)
Balance at June 30, 2025	$	1,070,155

The following table summarizes the changes in the carrying amount of goodwill for the nine months ended December 31, 2024 as follows (in thousands):

Balance at March 31, 2024	$	1,502,820
Goodwill impairment	(426,967)
Foreign currency translation impact	3,258
Balance at December 31, 2024	$	1,079,111

Intangible Assets

The net carrying amounts of intangible assets were $~~270~~249.09 million and $~~308~~258.7 million at ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025, respectively. Intangible assets acquired in a business combination 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 atduring ~~June~~fiscal ~~30,~~year ~~2024~~2025, the Company conducted an impairment test of its definite-lived intangible assets ~~at June 30, 2024~~. Based on ~~this~~that assessment, the Company concluded that the carrying values of the Company's definite-lived intangible assets were recoverable. At ~~September~~March ~~30, 2024 and December~~ 31, ~~2024~~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.

~~Intangible assets include the following amortizable intangible assets at December 31, 2024 (in thousands):~~14

	Cost		AccumulatedAmortization		Net
Developed technology	$	247,348	$	(240,425)	$	6,923
Customer relationships	760,250		(506,283)		253,967
Distributor relationships and technology licenses	5,043		(3,883)		1,160
Definite-lived trademark and trade name	57,537		(49,731)		7,806
Core technology	7,192		(7,192)		—
Capitalized software	3,317		(3,317)		—
Other	1,208		(1,037)		171
	$	1,081,895	$	(811,868)	$	270,027

Intangible assets include the following amortizable intangible assets at March 31, 2024 (in thousands):

	Cost		AccumulatedAmortization		Net
Developed technology	$	248,385	$	(238,470)	$	9,915
Customer relationships	763,943		(475,592)		288,351
Distributor relationships and technology licenses	7,785		(7,463)		322
Definite-lived trademark and trade name	57,699		(47,814)		9,885
Core technology	7,192		(7,192)		—
Capitalized software	3,317		(3,317)		—
Other	1,208		(1,022)		186
	$	1,089,529	$	(780,870)	$	308,659

Table of Contents

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Amortization of intangible assets included as:
Cost of product revenue	$	1,098	$	1,907	$	3,437	$	5,733
Operating expense	11,606		12,538		34,872		37,805
	$	12,704	$	14,445	$	38,309	$	43,538

Intangible assets include the following amortizable intangible assets at June 30, 2025 (in thousands):

The following is the expected future amortization expense at December 31, 2024 for the fiscal years ending March 31 (in thousands):


	Cost		Accumulated Amortization		Net
Developed technology	$	250,252	$	(244,863)	$	5,389
Customer relationships	770,589		(533,717)		236,872
Distributor relationships and technology licenses	5,220		(4,226)		994
Definite-lived trademark and trade name	57,990		(51,504)		6,486
Core technology	7,192		(7,192)		—




Capitalized software	3,317		(3,317)		—

Other	1,208		(1,047)		161
	$	1,095,768	$	(845,866)	$	249,902

2025 (remaining three months)	$	12,624
2026	46,561
2027	43,689
2028	40,737
2029	31,349
Thereafter	95,067
	$	270,027

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

NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES


	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 months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended
	June 30,
	2025		2024
Amortization of intangible assets included as:

Cost of product revenue	$	630	$	1,266
Operating expense	11,124		11,619
	$	11,754	$	12,885

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


2026 (remaining nine months)	$	35,343
2027	44,265
2028	41,297
2029	31,894
2030	28,967
Thereafter	68,136
	$	249,902

Table of Contents

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.

17The notional amounts and fair values of derivative instruments in the consolidated balance sheets at June 30, 2025 and March 31, 2025 were as follows (in thousands):

Table of Contents


	Notional Amounts (a)				Prepaid Expenses and Other Current Assets				Accrued Other
	June 30, 2025		March 31, 2025		June 30, 2025		March 31, 2025		June 30, 2025		March 31, 2025
Derivatives Designated as Hedging Instruments:
Forward contracts	$	11,855	$	10,649	$	318	$	197	$	28	$	55


					$	318	$	197	$	28	$	55

The notional amounts and fair values of derivative instruments in the consolidated balance sheets at December 31, 2024 and March 31, 2024 were as follows (in thousands):

	Notional Amounts (a)				Prepaid Expenses and Other Current Assets				Accrued Other
	December 31,2024		March 31,2024		December 31,2024		March 31,2024		December 31,2024		March 31,2024
Derivatives Designated as Hedging Instruments:
Forward contracts	$	10,333	$	11,676	$	—	$	11	$	324	$	74
Derivatives Not Designated as Hedging Instruments:
Forward contracts	—		—		—		—		—		—
					$	—	$	11	$	324	$	74

(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 income (~~OCI~~loss) and results of operations for the three months ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~2024 (in thousands):

Gain (Loss) Recognized in OCI on Derivative (a)

Gain (Loss) Reclassified from Accumulated OCI into Income (b)

December 31,2024

December 31,2023

Location

December 31,2024

December 31,2023

June 30,2025

June 30,2024

Location

June 30,2025

June 30,2024

Forward contracts

~~(576)~~330

~~250~~(117)

Research and development

7(2)

Sales and marketing

~~107~~(168)

3859

~~(576)~~330

~~250~~(117)

~~114~~(170)

3960

(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.

	Loss recognized in Income (a)
		Location	December 31,2024		December 31,2023
Forward contracts		General and administrative	$	—	$	(5)
			$	—	$	(5)

The Company had no forward exchange contracts not designed as hedging instruments during the three months ended June 30, 2025 and 2024.

~~(a)The~~NOTE ~~amount~~10 ~~represents~~– ~~the~~LONG-TERM ~~change in fair value of derivative contracts due to changes in spot rates.~~DEBT

~~The~~On ~~following~~July ~~table~~27, ~~provides~~2021, the ~~effect~~Company ~~that~~amended ~~foreign~~and ~~exchange~~extended ~~forward~~its ~~contracts~~existing ~~designated~~credit facility (as ~~hedging~~amended, ~~instruments~~the ~~had~~Second onAmended ~~other~~and ~~comprehensive~~Restated ~~income~~Credit ~~(OCI~~Agreement), ~~and~~which ~~results~~provided for a five-year, $800.0 million senior secured revolving credit facility, including a letter of ~~operations~~credit ~~for~~sub-facility of up to $75.0 million. The commitments under the ~~nine~~Second ~~months~~Amended ~~ended~~and ~~December~~Restated 31Credit 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 ~~2023~~Restated ~~(in~~Credit ~~thousands):~~Agreement.

	Gain (Loss) Recognized in OCI on Derivative (a)				Gain (Loss) Reclassified from Accumulated OCI into Income (b)
	December 31,2024		December 31,2023		Location	December 31,2024		December 31,2023
Forward contracts	$	(418)	$	110	Research and development	$	11	$	—
					Sales and marketing	148		(76)
	$	(418)	$	110		$	159	$	(76)

1816

Table of Contents

	Loss recognized in Income (a)
		Location	December 31,2024		December 31,2023
Forward contracts		General and administrative	$	—	$	(5)
			$	—	$	(5)

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 ~~amount~~Company ~~represents~~may elect to use the ~~change~~amended incredit ~~fair~~facility ~~value~~for ofworking ~~derivative~~capital ~~contracts~~and ~~due~~other general corporate purposes (including to ~~changes~~repurchase inshares ~~spot~~of ~~rates~~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.

~~NOTE~~In 11connection –with ~~LONG-TERM~~the ~~DEBT~~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 March 31, 2025, there were no amounts outstanding under the Third Amended and Restated Credit Agreement.

OnAt ~~July~~the ~~27,~~Company's ~~2021~~election, revolving loans under the ~~Company~~Third ~~amended~~Amended and ~~extended~~Restated ~~its~~Credit ~~existing~~Agreement bear interest at either (a) a term SOFR rate plus a credit ~~facility~~spread adjustment of 0.10% or (asb) ~~amended,~~an ~~the~~Alternate ~~Second~~Base ~~Amended~~Rate ~~and~~(defined ~~Restated~~in ~~Credit~~a ~~Agreement~~customary manner), ~~which~~in ~~provided~~each case plus an applicable margin. For the period from the delivery of our financial statements for athe ~~five-~~year ended March 31, ~~$800.0 million~~2025, ~~senior~~until ~~secured~~the ~~revolving~~Company ~~credit~~has ~~facility,~~delivered ~~including~~financial astatements ~~letter~~for ofthe ~~credit~~quarter ~~sub-facility~~ended ofJune 30, up2025, tothe ~~$75~~applicable margin will be 1.00% per annum for term SOFR loans and 0 ~~million.~~% ~~The~~per ~~commitments~~annum ~~under~~for ~~the~~Alternate ~~Second~~Base ~~Amended~~Rate loans, and ~~Restated~~thereafter ~~Credit~~the ~~Agreement~~applicable ~~were~~margin ~~set~~will tovary ~~expire~~depending on ~~July~~the ~~27,~~Company's ~~2026~~consolidated gross leverage ratio, ~~and~~ranging ~~any~~from ~~outstanding~~1.00% ~~loans~~per ~~were~~annum ~~due~~for onAlternate ~~that~~Base ~~date~~Rate loans and 2.00% Onper ~~May~~annum ~~13,~~for ~~2024,~~term SOFR loans if the Company's ~~repaid~~consolidated ~~$25~~gross leverage ratio is greater than 3.50 to 1.00, down to 0 ~~million~~% ofper ~~borrowings~~annum ~~under~~for ~~the~~Alternate ~~Second~~Base ~~Amended~~Rate loans and ~~Restated~~1.00% ~~Credit~~per ~~Agreement~~annum for term SOFR loans if the Company's consolidated gross leverage ratio is equal to or less than 1.50 to 1.00.

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 refinance revolving loans outstanding under the Second Amended and Restated Credit Agreement and to repurchase of 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 three and nine months ended December 31, 2024. At December 31, 2024, $75.0 million was outstanding under the Third Amended and Restated Credit Agreement. 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 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 initial period until the Company has delivered financial statements for the quarter ended December 31, 2024, 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.

19Commitment 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 March 31, 2025, until the Company has delivered financial statements for the quarter ended June 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.

Table of Contents

Commitment fees will accrue on the daily unused amount of the credit facility. For the initial period until the Company has delivered financial statements for the quarter ended December 31, 2024, 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 3.50 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 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) ~~are~~ 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 December 31, 2024, the Company was in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.17

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.

The Company had unamortized capitalized debt issuance costs, net of $3.1 million at December 31, 2024, 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 $2.4 million was included as other assets in the Company's consolidated balance sheet at December 31, 2024.

NOTE 12 – RESTRUCTURING CHARGES

During the first quarter of 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 three months and nine months ended December 31, 2024, the Company recorded restructuring charges totaling $0.6 million and $19.6 million, respectively, related to one-time termination benefits for one hundred forty-two employees who voluntarily terminated their employment with the Company during the nine months ended December 31, 2024. All one-time termination benefits are expected to be paid in full by the end of the fiscal year ending March 31, 2025.

Table of Contents

~~During~~dividends ~~the~~and ~~third~~distributions, ~~quarter~~investments of(including ~~fiscal year 2025~~acquisitions), ~~the~~transactions ~~Company~~with ~~entered~~affiliates, ~~into~~asset ~~transition~~sales, ~~agreements~~including ~~that~~sale-leaseback ~~provided~~transactions, ~~termination~~speculative ~~benefits~~hedge ~~for~~agreements, ~~certain~~payment ~~employees to ensure an orderly transition~~ of ~~responsibilities~~junior ~~for~~financing, ~~continuity purposes. As a result of the related workforce~~ changes, ~~during~~in ~~the~~business ~~three months~~ and ~~nine~~other ~~months~~limitations ~~ended~~customary ~~December~~in ~~31,~~senior ~~2024,~~secured ~~the~~credit ~~Company recorded restructuring charges totaling $0~~facilities.~~3 million.~~ The ~~Company~~Third ~~estimates~~Amended ~~that~~and ~~approximately~~Restated ~~$0.6 million,~~Credit ~~$1.0 million~~Agreement ~~and~~provides ~~$0.1 million~~for incertain ~~additional~~baskets ~~restructuring~~that ~~charges~~are ~~will~~available beto ~~recorded in~~ the ~~fiscal~~Company ~~years~~and ~~ending~~its ~~March~~restricted ~~31,~~subsidiaries ~~2025,~~to ~~2026~~incur ~~and~~additional ~~2027~~indebtedness, ~~respectively, related~~ to ~~one-time~~repay ~~termination~~junior ~~benefits~~financing, for ~~the~~asset ~~ten~~sales ~~employees~~and ~~who continue~~ to ~~render~~make ~~services~~investments toand ~~the~~restricted ~~Company~~payments. ASuch ~~majority~~baskets ~~of the one-time termination benefits~~ are ~~expected~~substantially similar to ~~be paid in full by~~ the ~~end~~baskets ofset ~~the~~forth ~~second quarter of fiscal year ending March 31, 2026, with the remaining amounts expected to be paid~~ in ~~full by~~ the ~~end~~Company’s ofprevious ~~the~~amended ~~fiscal~~credit ~~year ending March 31, 2027~~agreement.

	Q1 FY25 VSP		Q3 FY25 Plan
	Employee-related		Employee-related		TOTAL
Balance at March 31, 2024	$	—	$	—	$	—
Restructuring charges to operations	19,608		291		19,899
Payments	(19,421)		—		(19,421)
Other adjustments	(9)		—		(9)
Balance at December 31, 2024	$	178	$	291	$	469

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 June 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.

~~NOTE~~The ~~13 –~~Third ~~LEASES~~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 ~~determines~~had ifunamortized ancapitalized ~~arrangement~~debt isissuance acosts, ~~lease~~net atof ~~inception~~$3.1 ~~Right-of-use~~million ~~(ROU)~~at ~~assets~~June 30, ~~represent~~2025, ~~the~~which ~~Company's~~are ~~right~~being toamortized ~~use~~over ~~an underlying asset for~~ the ~~duration~~life of the ~~lease~~revolving ~~term~~credit facility. ~~Lease~~The ~~liabilities~~unamortized ~~represent~~capitalized ~~the~~debt ~~Company's~~issuance ~~contractual~~costs ~~obligation~~balance toof ~~make lease payments over the lease term~~$0.7 ~~The~~million ~~Company's~~was ~~policy~~included isas toprepaid ~~combine~~expenses ~~lease~~ and ~~non-lease~~other ~~components~~current ~~and to not recognize ROU~~ assets and ~~lease~~a ~~liabilities~~balance ~~for~~of ~~short-term leases~~$2.4 ~~Leases~~million ~~with~~was anincluded ~~initial term of twelve months or less are classified~~ as ~~short-term~~other ~~leases. ROU~~ assets ~~are~~in ~~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~~consolidated ~~incremental~~balance ~~borrowing~~sheet ~~rate~~at ~~unless~~June 30, ~~the lessor's implicit rate is readily determinable~~2025. 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~~NOTE ~~Company~~11 ~~has~~– ~~operating~~RESTRUCTURING 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 7 years. The Company'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.CHARGES

~~The~~During ~~Company~~the ~~has~~fiscal ~~asset~~year ~~retirement~~2025, ~~obligations (ARO) to return certain leased facilities to their original condition at~~ the ~~end~~Company ofimplemented ~~the~~a ~~respective~~voluntary ~~lease~~separation ~~term.~~program ~~The~~(VSP) ~~estimated~~for ~~fair~~employees ~~value~~who ofmet ~~these~~certain ~~ARO~~age ~~liabilities~~and isservice ~~recognized~~requirements into ~~the~~reduce ~~period~~overall inheadcount. ~~which~~As ~~the liability is generated and~~ a ~~corresponding~~result ~~increase to the carrying value~~ of the related ~~asset~~workforce isreduction, ~~recorded~~during ~~and depreciated over~~ the ~~useful~~fiscal ~~life~~year ofended ~~the~~March ~~asset.~~31, ~~The Company's estimates of its ultimate AROs could change because of changes in regulations~~2025, the ~~extent~~Company ofrecorded ~~environmental~~restructuring ~~remediations~~charges ~~required, the means~~ of ~~reclamation, cost estimates, exit or disposal activities or time period estimates. ARO liabilities totaled~~ $219.16 million ~~and~~to ~~$2.3 million~~one-time attermination ~~December~~benefits ~~31,~~for ~~2024~~one ~~and~~hundred ~~March~~forty-two ~~31,~~employees ~~2024,~~who ~~respectively.~~voluntarily ~~There~~terminated ~~was~~their aemployment ~~balance~~with ofthe ~~$2.1 million~~Company ~~included~~during ~~in other long-term liabilities in~~ the ~~consolidated~~fiscal ~~balance~~year ~~sheets~~ended atMarch ~~December~~ 31, ~~2024,~~2025. ~~and~~All aone-time ~~balance~~termination ofbenefits ~~$0.1 million~~were ~~included~~completed in ~~accrued~~full ~~other~~during ~~and~~the afirst ~~balance~~quarter of ~~$2.2 million included in other long-term liabilities in~~ the ~~consolidated~~fiscal ~~balance~~year ~~sheets~~ending at March 31, ~~2024~~2026. ~~Accretion expense related to these liabilities was not material for any periods presented.~~

~~Most~~In addition to the VSP, during the third quarter of fiscal year 2025, the Company's ~~lease~~entered into transition agreements ~~contain~~that ~~variable~~provided ~~payments,~~termination ~~primarily~~benefits for ~~common~~certain ~~area~~employees ~~maintenance~~to ~~(CAM)~~ensure an orderly transition of responsibilities for continuity purposes. As a result of the related workforce changes, ~~which~~during ~~are~~the ~~expensed~~fiscal asyear ~~incurred~~ended March 31, 2025, the Company recorded restructuring charges totaling $0.9 million. The Company estimates that approximately $0.4 million and ~~not~~$0.1 million ~~included~~in additional restructuring charges will be recorded in the ~~measurement~~fiscal years ending March 31, 2026 and 2027, respectively, related to one-time termination benefits for the eight employees who continue to render services to the Company. A majority of the ~~ROU~~one-time ~~assets~~termination ~~and~~benefits ~~lease~~are ~~liabilities~~expected to be 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.

21During the first quarter of fiscal year 2026, the Company recorded restructuring charges of $0.5 million.

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	—		529		529

Other adjustments	(9)		—		(9)
Balance at June 30, 2025	$	—	$	1,435	$	1,435

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

Table of Contents

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Lease cost under long-term operating leases	$	2,962	$	3,027	$	8,889	$	9,113
Lease cost under short-term operating leases	334		402		993		1,240
Variable lease cost under short-term and long-term operating leases	1,074		941		3,152		3,142
Total operating lease cost	$	4,370	$	4,370	$	13,034	$	13,495

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.

	Nine Months Ended
	December 31,
	2024		2023
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,080	$	1,362

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 Company'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.

	December 31, 2024		March 31, 2024
Weighted average remaining lease term in years - operating leases	4.92		5.32
Weighted average discount rate - operating leases	4.3	%	4.2	%

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 totaled $2.3 million and $2.2 million at June 30, 2025 and March 31, 2025, respectively. ARO liabilities are included in other long-term liabilities in the consolidated balance sheets at June 30, 2025 and March 31, 2025, respectively. Accretion expense related to these liabilities was not material for any periods presented.

~~Future~~Most ~~minimum~~of the Company's lease agreements contain variable payments, ~~under~~primarily ~~non-cancellable~~for ~~leases~~common atarea ~~December 31~~maintenance, ~~2024~~which are expensed as ~~follows~~incurred (and not included in ~~thousands):~~the measurement of the ROU assets and lease liabilities.

The components of operating lease cost for the three months ended June 30, 2025 and 2024, respectively, were as follows (in thousands):

Year ending March 31:
	Three Months Ended
2025 (remaining three months)	$	2,318
	June 30,
2026	11,913
	2025		2024
2027	8,792
Lease cost under long-term operating leases	$	2,853	$	2,961
2028	7,679
Lease cost under short-term operating leases	336		326
2029	6,821
Variable lease cost under short-term and long-term operating leases	962		1,316
Thereafter	9,715
Total operating lease cost	$	4,151	$	4,603
Total lease payments	$	47,238
Less imputed interest	(4,481)
Present value of lease liabilities	$	42,757

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

NOTE 14 – COMMITMENTS AND CONTINGENCIES


	Three Months Ended
	June 30,
	2025		2024
Right-of-use assets obtained in exchange for new operating lease liabilities	$	767	$	50

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

As previously disclosed, in March 2016, Packet Intelligence LLC (Packet Intelligence or Plaintiff) filed a Complaint against NetScout and two subsidiary entities in the United States District Court for the Eastern District of Texas asserting infringement of five United States patents. Plaintiff's Complaint alleged that legacy Tektronix GeoProbe products, including the G10 and GeoBlade products, infringed these patents. NetScout filed an Answer denying Plaintiff's allegations and asserting that Plaintiff's patents were, among other things, invalid, not infringed, and unenforceable due to inequitable conduct. In October 2017, a jury rendered a verdict finding in favor of the Plaintiff and that Plaintiff was entitled to $3.5 million for pre-suit damages and $2.3 million for post-suit damages. In September 2018, the Court entered judgment and "enhanced" the jury verdict in the amount of $2.8 million as a result of a jury finding. The judgment also awarded pre- and post-judgment interest, and a running royalty on the G10 and GeoBlade products until the expiration of the patents at issue, the last date being June 2022. Following the entry of final judgment, NetScout appealed, and in July 2020, the Court of Appeals for the Federal Circuit (Federal Circuit) issued a decision vacating the $3.5 million pre-suit damages award, affirming the $2.3 million post-suit


	June 30, 2025		March 31, 2025
Weighted average remaining lease term in years - operating leases	4.54		4.77

Weighted average discount rate - operating leases	4.4	%	4.4	%

2219

Table of Contents

~~damages~~Future ~~award,~~minimum ~~vacating~~payments ~~the~~under $2.8 million enhancement award, and remanding to the district court to determine what, if any, enhancement should be awarded. In March 2021, NetScout filed a petition for a writ of certiorari to the United States Supreme Court, which was denied, challenging, among other issues, the basis for enhanced damages and the patentability of the claimed technology. On September 8 and 9, 2021, in proceedings initiated by third parties that did not involve NetScout, the Patent Trial and Appeal Board (PTAB) invalidated all the patent claims that were also asserted against NetScout in this case. After the PTAB decisions were issued, NetScout moved, among other things, to dismiss the case and enter judgment in its favor on the grounds that the PTAB decisions invalidating the asserted claims precluded Plaintiff from continuing to assert its patent infringement causes of action and from seeking damages from NetScout. The District Court denied NetScout’s motion with respect to its request to dismiss the case and enter judgment in its favor. The District Court entered an amended final judgment awarding Plaintiff $2.3 million in postnon-~~suit~~cancellable ~~damages,~~leases ~~$1.1 million in enhanced damages, pre- and post-judgment interest, and a running royalty on the G10 and GeoBlade products until the expiration of the patents~~ at ~~issue, the last expiration date being~~ June ~~2022. On July 20~~ 30, ~~2022,~~2025 ~~NetScout~~are ~~filed a notice of appeal to the Federal Circuit from, among other things, the amended final judgment. On May 2, 2024, in a separate action the Federal Circuit affirmed the PTAB decisions, which~~ as afollows ~~result found that all of the patent claims asserted by Packet Intelligence against NetScout were invalid. Also on May 2, 2024, the Federal Circuit ruled~~ (in NetScout's favor in its appeal, vacating the District Court's final judgment and remanding the case to the District Court to dismiss the case against NetScout as moot. As a result, during the year ended March 31, 2024, NetScout concluded that the risk of loss associated with damages that may result from this case was remote and recorded a $4.6 million reduction in contingent liabilities and legal fees. On June 26, 2024, the District Court issued its Order dismissing the case against NetScout.thousands):

NOTE 15 – PENSION BENEFIT PLANS


Year ending March 31:
2026 (remaining nine months)	$	8,687
2027	10,419
2028	9,022
2029	7,675
2030	6,632
Thereafter	3,131
Total lease payments	$	45,566
Less imputed interest	(4,033)
Present value of lease liabilities	$	41,533

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

Certain of the Company's non-U.S. employees participate in noncontributory defined benefit pension plans. None 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 three months ended June 30, 2025 and 2024 (in thousands):

	Three Months Ended				~~Nine Months Ended~~
	December 31,				December 31,
	June 30,
	2024		2023		2024		2023
	2025		2024
Service cost	$	4642	$	5247	$	~~142~~	$	~~152~~
Interest cost	~~238~~277		~~253~~245		~~739~~		~~741~~
Amortization of net gain	(~~113~~161)		(~~235~~116)		~~(350)~~		~~(686)~~
Net periodic pension cost	$	~~171~~158	$	70176	$	~~531~~	$	~~207~~

Expected Contributions

During the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, the Company made contributions of $0.52 million to its defined benefit pension plans. During the fiscal year ending March 31, ~~2025~~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 1615 – TREASURY STOCK

On ~~October~~May 243, ~~2017~~2022, the Company's ~~Board~~board of ~~Directors~~directors approved a share repurchase program that ~~enabled~~enables the Company to repurchase up to twenty-five million shares of its common stock (~~2017~~2022 Share Repurchase Program). ~~Through~~ ~~March~~The ~~31,~~2022 ~~2024,~~Share ~~the~~Repurchase ~~Company~~Program ~~repurchased~~became ~~all~~effective ofin the ~~authorized~~third ~~25,000,000~~quarter ~~shares~~of ~~for~~fiscal ~~$694~~year 2024.1 ~~million~~The inCompany ~~the~~is ~~open~~not ~~market~~obligated ~~under~~to acquire any specific amount of common stock within any particular timeframe as a result of the ~~2017~~2022 Share Repurchase Program. ~~The~~Through June 30, 2025, the Company repurchased 12,~~209~~737,~~153~~970 shares for $3356.6 million ~~during~~under the ~~nine~~2022 ~~months~~Share ~~ended~~Repurchase ~~December~~Program. 31The Company repurchased 761,249 ~~2023~~shares for $15.0 million under this share repurchase program during the ~~2017~~three ~~Share~~months ~~Repurchase~~ended ~~Program.~~

On May 3, 2022, the Company's Board of Directors approved an additional 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 when the 2017 Share Repurchase Program was completed. 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 December 31, 2024, the Company repurchased 1,976,721 shares for $41.6 million under the 2022 Share Repurchase Program. The Company repurchased 1,362,205 shares for $25.3 million 20

Table of Contents

~~under~~June ~~this share repurchase program during the nine months ended December 31~~30, ~~2024~~2025. At ~~December~~June 3130, ~~2024~~2025, 2322,~~023~~262,~~279~~030 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 withheld ~~697~~597,~~899~~115 shares and ~~644~~617,~~125~~826 shares at a cost of $13.8 million and $1912.2 million, respectively, related to minimum statutory tax withholding requirements on these restricted stock units during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~2024, respectively. These withholding transactions do not fall under the share repurchase programs described above, and therefore do not reduce the number of shares that are available for repurchase under those programs.

NOTE 1716 – NET ~~INCOME (~~LOSS) PER SHARE

Calculations of the basic and diluted net loss per share and potential common shares are as follows (in thousands, except for per share data):

	Three Months Ended				~~Nine Months Ended~~
	December 31,				December 31,
	June 30,
	2024		2023		2024		2023
	2025		2024
Numerator:
Net income (loss)	$	48,810	$	(132,577)	$	(385,539)	$	(115,315)
Net loss	$	(3,679)	$	(443,376)
Denominator:
Denominator for basic net income (loss) per share - weighted average common shares outstanding	71,737		71,077		71,551		71,577
Denominator for basic net loss per share - weighted average common shares outstanding	71,729		71,467
Dilutive common equivalent shares:
Weighted average restricted stock units and performance-based restricted stock units	~~832~~—		—		—		—
Denominator for diluted net income (loss) per share - weighted average shares outstanding	72,569		71,077		71,551		71,577
Denominator for diluted net loss per share - weighted average shares outstanding	71,729		71,467
Net income (loss) per share:
Net loss per share:
Basic net income (loss) per share	$	0.68	$	(1.87)	$	(5.39)	$	(1.61)
Basic net loss per share	$	(0.05)	$	(6.20)
Diluted net income (loss) per share	$	0.67	$	(1.87)	$	(5.39)	$	(1.61)
Diluted net loss per share	$	(0.05)	$	(6.20)

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

Three Months Ended

~~Nine Months Ended~~

December 31,

June 30,

2024

2023

2024

2023

2025

2024

Restricted stock units

1,~~944~~647

~~561~~1,326

~~534~~

~~778~~

Basic net ~~income (~~loss) per share is calculated by dividing net ~~income (~~loss) by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. 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 three months ended ~~December~~June 3130, ~~2023,~~2025 and ~~the nine months ended December 31,~~ 2024 ~~and 2023~~, all outstanding restricted stock units and performance-based restricted stock units have an anti-dilutive effect and are therefore excluded from the computation of diluted weighted average shares outstanding.

NOTE 1817 – 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 credits and the foreign derived intangible income deduction.

The Company's effective tax rates were 1430.91% and 02.93% for the three months ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~2024, respectively. The effective tax rate for the three months ended ~~December~~June 3130, ~~2024~~2025 differed from the effective tax rate for the three months ended ~~December~~June 3130, ~~2023~~2024, primarily related to a decrease in foreign withholding taxes offset by a significant goodwill impairment charge incurred during the ~~research~~three ~~and~~months ~~development~~ended ~~tax~~June ~~credit~~30, ~~and~~2024 anwhich ~~increase~~was innot ~~foreign~~deductible ~~withholding~~for ~~taxes~~tax purposes.

2421

Table of Contents

~~The~~On ~~Company's~~July ~~effective~~4, 2025, new U.S tax ~~rates~~legislation ~~were~~was ~~0.4%~~signed ~~and~~into ~~3.3%~~law ~~for~~(known as the ~~nine~~"One ~~months~~Big ~~ended~~Beautiful ~~December~~Bill ~~31,~~Act" ~~2024~~or ~~and~~"OBBBA") ~~2023,~~which ~~respectively. The~~makes ~~effective~~permanent ~~tax~~many ~~rate~~of ~~for~~ the ~~nine~~tax ~~months~~provisions ~~ended~~enacted ~~December~~in ~~31,~~2017 ~~2024~~as ~~differed~~part ~~from~~of the ~~effective~~Tax ~~tax~~Cuts ~~rate~~and ~~for~~Jobs ~~the~~Act ~~nine~~that ~~months~~were ~~ended~~set ~~December~~to ~~31,~~expire ~~2023~~at ~~primarily~~the ~~related~~end toof a2025. ~~decrease~~In inaddition, the ~~research~~OBBBA ~~and~~makes ~~development~~changes to certain U.S. corporate tax ~~credit~~provisions, anbut ~~increase~~many inare ~~foreign~~generally ~~withholding~~not ~~taxes~~effective ~~and~~until ~~goodwill~~2026. ~~impairment~~The ~~incurred~~Company ~~during~~is ~~the~~currently ~~nine~~evaluating ~~months~~the ~~ended~~impact ~~December~~of ~~31,~~the ~~2024,~~new ~~which~~legislation ~~was~~but does not ~~deductible~~expect ~~for~~it ~~tax~~to ~~purposes~~have a material impact on the results of operations.

NOTE 1918 – SEGMENT AND GEOGRAPHIC INFORMATION

The Company's ~~reports~~operating ~~revenues~~segments are determined based on the units that constitute a business for which discrete financial information is available and ~~income~~for ~~under~~which ~~one~~operating ~~reportable~~results ~~segment~~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

~~Nine Months Ended~~

December 31,

June 30,

2024

2023

2024

2023

2025

2024

United States

~~153~~100,~~875~~504

~~123~~99,~~732~~949

~~365,059~~

~~367,112~~

Europe

4630,~~619~~714

4531,~~363~~394

~~110,107~~

~~111,531~~

Asia

1815,~~237~~050

1711,~~257~~890

~~47,163~~

~~47,982~~

Rest of the world

3340,~~288~~479

31,~~720~~332

~~95,363~~

~~99,387~~

~~252~~186,~~019~~747

~~218~~174,~~072~~565

~~617,692~~

~~626,012~~

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.

NOTE 2019 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in its consolidated financial statements through the date the consolidated financial statements were issued. ~~Except as disclosed in Note 11, "Long-term Debt," no other recordable or disclosable events occurred.~~

25On August 4, 2025, the Company sold its entire equity investment in Napatech for the equivalent of approximately $12 million.

Table of Contents

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, ~~2024~~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 ~~on Form 10-K for the fiscal year ended March 31, 2024~~. 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, 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.

Global and Macroeconomic Conditions

We continue to closely monitor current global and macroeconomic conditions, including the impacts of the ongoing ~~wars~~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), 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 cautiously optimistic amid 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.

inThough ~~Ukraine~~we continue to monitor the impacts of evolving global and macroeconomic conditions on our business, we ~~ceased~~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 incombined ~~Russia~~with cash, ~~including~~cash ~~sales~~equivalents, ~~support~~marketable onsecurities ~~existing~~and ~~contracts~~investments and ~~professional~~borrowing ~~services~~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

The macroeconomic environment remains challenging with constrained customer spending and we expect this to persist for the remainder of fiscal year 2025. 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.23

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 for the future. In addition to our cash equivalents, based on covenant levels at December 31, 2024, we had an incremental $525 million available to us under our revolving credit facility.

Table of Contents

for the future. In addition to our cash equivalents, based on covenant levels at June 30, 2025, the Company had $600 million available under a revolving credit facility.

Results Overview

Total revenue ~~decreased~~increased $812.32 million, or 17%, for the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, as compared to total revenue for the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024, ~~which~~due ~~benefited~~to ~~from~~an ~~approximately~~increase ~~$48 million of backlog-related revenue. Excluding this factor, revenue would have increased on a year over year basis. The decrease~~ in ~~total~~ revenue ~~for the nine months ended December 31, 2024 as compared to total revenue for the nine months ended December 31, 2023 was a result of lower revenue~~ from both ~~service provider and~~ enterprise customers ~~from~~and service ~~assurance offerings, including radio frequency propagation modeling projects, due to industry-specific capital spending constraints, as well as a decrease in revenue from service~~ provider customers from cybersecurity offerings, ~~partially~~and ~~offset by an increase in revenue from~~ enterprise customers from ~~cybersecurity~~service assurance offerings.

Our gross profit percentage ~~remained~~increased ~~flat~~two atpercentage 78points to 76.7% during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, as compared with the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024, primarily due to ~~lower~~product ~~sales~~revenue ~~volume~~growth ~~offset~~and bylower ~~a shift in~~ product ~~mix to higher margin products~~ and ~~services~~support costs.

Net loss for the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025 was $~~385~~3.57 million, as compared with net loss for the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024 of $~~115~~443.34 million. The ~~increase~~decrease of $~~270~~439.27 million in net loss was primarily due to a $~~259~~427.90 million ~~increase~~decrease in goodwill impairment charges, a $1916.90 million ~~increase~~decrease from restructuring charges ~~due to the restructuring programs implemented during the nine months ended December 31~~, ~~2024, an $8.3 million decrease in revenue,~~ a $412.12 million increase in ~~expenses related to trade shows~~revenue, ~~user conferences, and other events,~~ a $15.~~4 million increase from software licenses, and a $1.~~2 million ~~increase~~decrease in ~~legal~~other ~~fees.~~income ~~These~~primarily ~~increases~~due to ~~net~~the ~~loss~~change ~~were~~in ~~partially~~fair ~~offset~~value byof athe ~~$5.2~~equity ~~million~~investment ~~decrease~~ in ~~amortization expense of intangible assets~~Napatech, a $4.18 million ~~net~~ decrease in employee related expenses as a result of a decrease in headcount, partially offset by an increase in variable incentive compensation, a $31.~~8 million gain on the divestiture of the Test Optimization business recognized in fiscal year 2024, a $3.~~4 million decrease ~~from~~in ~~depreciation~~interest expense, adue ~~$2.2~~to ~~million~~repayment ~~decrease~~of inoutstanding ~~direct~~loan ~~material~~balance ~~costs,~~and a $21.21 million decrease in ~~income~~amortization ~~tax~~ expense, aof $1intangible assets.5 ~~million~~These ~~decrease~~decreases into ~~contractor~~net ~~fees,~~loss awere ~~$1.4~~partially ~~million~~offset ~~decrease~~by inan ~~advertising expense, a~~ $111.2 million increase in ~~interest~~ income tax expense, a $12.63 million increase in ~~other income from the change in fair value of a~~ foreign ~~equity~~exchange ~~investment~~expense, and a $1.0 million ~~decrease~~increase in ~~commissions~~salaries ~~expense~~associated with executive transition costs.

At ~~December~~June 3130, ~~2024~~2025, we had cash, cash equivalents, marketable securities and investments (current and non-current) of $~~427~~543.95 million. This represents an increase of $351.80 million from $~~424~~492.15 million at March 31, ~~2024~~2025. This increase was primarily due to $7673.16 million of net cash provided by operations, ~~partially offset by~~ $254.37 million ~~used~~increase tofrom ~~repurchase~~the ~~shares~~exchange ofrate ~~our~~changes ~~common~~and ~~stock, net~~ $253.05 million ~~used~~increase tofrom ~~repay~~the ~~long-term~~change ~~debt,~~in ~~$13.8~~fair ~~million~~value ~~used~~of ~~for~~an ~~tax~~equity ~~withholdings~~investment, onpartially ~~restricted~~offset ~~stock~~by ~~units,~~ $415.0 million used ~~for~~to ~~capital~~repurchase ~~expenditures~~shares of our common stock, $213.58 million used for ~~the~~tax ~~payment~~withholdings ofon ~~debt~~restricted ~~issuance~~stock ~~costs,~~units and $1.39 million used tofor ~~acquire~~capital ~~technology~~expenditures ~~licenses~~ during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025.

Use of Non-GAAP Financial Measures

We supplement the United States generally accepted accounting principles (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 net income per share (diluted) and non-GAAP earnings before interest and other expense, income taxes, depreciation, and amortization (EBITDA) 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 ~~removes~~includes the aforementioned adjustments related to non-GAAP gross profit and also removes ~~legal~~goodwill ~~expenses~~impairment ~~related~~charges, toexecutive ~~civil~~transition ~~judgments,~~costs ~~gain~~and onrestructuring ~~the~~charges. ~~divestiture~~Non-GAAP ofoperating amargin ~~business,~~includes ~~goodwill~~the ~~impairment~~foregoing ~~charges,~~adjustments ~~and~~related ~~restructuring~~to ~~charges~~non-GAAP income from operations. Non-GAAP net income removes the foregoing adjustments related to non-GAAP income from operations, and also removes ~~loss on extinguishment of debt and change in~~ the ~~fair~~income ~~value~~tax ofeffects ~~derivative instrument, net~~ of ~~related~~such ~~income tax effects~~adjustments. Non-GAAP EBITDA from operations removes the aforementioned items 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 (revenue, 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 we plan and measure our business. We believe that providing these non-GAAP measures affords investors 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 may not be indicative of our core operating results. Furthermore, management believes that the presentation of non-GAAP measures when shown in

2724

Table of Contents

~~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 nine~~ months ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~2024, respectively (dollars in thousands, except for per share data):

	Three Months Ended				~~Nine Months Ended~~
	December 31,				December 31,
	June 30,
	2024		2023		2024		2023
	2025		2024
Revenue (GAAP and non-GAAP)	$	252,019	$	218,072	$	617,692	$	626,012
Revenue (GAAP)	$186,747		$	174,565
GAAP gross profit	$	~~205~~143,~~407~~325	$	~~174~~130,~~448~~196	$	~~484,654~~	$	~~488,940~~
Share-based compensation expense	23,~~196~~160		23,~~375~~320		~~7,716~~		~~7,924~~
Amortization of acquired intangible assets	~~994~~550		~~1,636~~995		~~2,985~~		~~4,912~~
Acquisition related depreciation expense	12		2		5		11
Non-GAAP gross profit	$	~~208~~147,~~598~~037	$	~~178~~134,~~461~~513	$	~~495,360~~	$	~~501,787~~
GAAP income (loss) from operations	$	61,713	$	(134,447)	$	(387,488)	$	(112,850)
GAAP loss from operations	$	(6,564)	$	(463,324)
Share-based compensation expense	1419,~~502~~959		1621,~~364~~198		~~50,586~~		~~54,653~~
Amortization of acquired intangible assets	1211,~~595~~669		1412,~~169~~609		~~37,842~~		~~42,702~~
Restructuring charges	~~923~~529		—16,563		~~19,895~~		—
Goodwill impairment	—		~~167~~426,~~106~~967		~~426,967~~		~~167,106~~
Acquisition related depreciation expense	13		12		36		108
Executive transition costs	959		—
Gain on divestiture of a business	—		—		—		(3,806)
Acquisition related depreciation expense	12		12
Legal expenses related to civil judgments	—		45		—		130
Non-GAAP income from operations	$	26,564	$	14,025
Non-GAAP income from operations	$	89,746	$	63,249	$	147,838	$	148,043
GAAP net loss	$	(3,679)	$	(443,376)
GAAP net income (loss)	$	48,810	$	(132,577)	$	(385,539)	$	(115,315)
Share-based compensation expense	19,959		21,198
Share-based compensation expense	14,502		16,364		50,586		54,653
Amortization of acquired intangible assets	11,669		12,609
Amortization of acquired intangible assets	12,595		14,169		37,842		42,702
Restructuring charges	529		16,563
Restructuring charges	923		—		19,895		—
Goodwill impairment	—		426,967
Goodwill impairment	—		167,106		426,967		167,106
Executive transition costs	959
Acquisition-related depreciation expense	1312		12		36		~~108~~
Gain on divestiture of a business	—		—		—		(3,806)
Income tax adjustments	(4,712)		(13,395)
Legal expenses related to civil judgments	—		45		—		130
Non-GAAP net income	$	24,737	$	20,578
Loss on extinguishment of debt	1,134		—		1,134		—
Change in fair value of derivative instrument	—		—		—		(206)
Income tax adjustments	(9,695)		(13,085)		(28,499)		(26,085)
Non-GAAP net income	$	68,282	$	52,034	$	122,422	$	119,287






GAAP diluted net loss per share	$	(0.05)	$	(6.20)
Per share impact of non-GAAP adjustments identified above	0.39		6.48
Non-GAAP diluted net income per share	$	0.34	$	0.28

GAAP loss from operations	$	(6,564)	$	(463,324)
Previous adjustments to determine non-GAAP income from operations	33,128		477,349
Non-GAAP income from operations	26,564		14,025
Depreciation excluding acquisition-related depreciation expense	2,776		3,784
Non-GAAP EBITDA from operations	$	29,340	$	17,809

Table of Contents

GAAP diluted net income (loss) per share	$	0.67	$	(1.87)	$	(5.39)	$	(1.61)
Per share impact of non-GAAP adjustments identified above	0.27		2.60		7.09		3.26
Non-GAAP diluted net income per share	$	0.94	$	0.73	$	1.70	$	1.65
GAAP income (loss) from operations	$	61,713	$	(134,447)	$	(387,488)	$	(112,850)
Previous adjustments to determine non-GAAP income from operations	28,033		197,696		$	535,326	$	260,893
Non-GAAP income from operations	89,746		63,249		$	147,838	$	148,043
Depreciation excluding acquisition-related depreciation expense	3,077		4,337		$	10,312	$	14,118
Non-GAAP EBITDA from operations	$	92,823	67,586		$	158,150	$	162,161

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~~, intangible assets and other acquisition accounting items~~.

Please refer to the critical accounting policies set forth in our Annual Report ~~on Form 10-K~~ for ~~the fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission (SEC) on May 16, 2024, for~~ a description of all of our critical accounting policies and estimates.

Three Months Ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~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 ~~December~~June 3130, ~~2024,~~2025 ~~one~~and ~~direct~~June ~~customer~~30, ~~Verizon~~2024, ~~accounted for more than 10% of our total revenue, while~~ no ~~channel partners accounted for more than 10% of our total revenue. During the three months ended December 31, 2023, no~~ direct customers or channel partners accounted for more than 10% of our total revenue.

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Revenue:
Product	$	~~128~~72,~~175~~993	5139	%	$	9561,~~832~~169	4435	%	$	3211,~~343~~824	3419	%
Service	~~123~~113,~~844~~754		4961		~~122~~113,~~240~~396		5665		~~1,604~~358		1—	%
Total revenue	$	~~252~~186,~~019~~747	100	%	$	~~218~~174,~~072~~565	100	%	$	3312,~~947~~182	167	%

29Product. The 19.3%, or $11.8 million, increase in product revenue compared with the same period last year was primarily due to an increase in revenue from both enterprise customers and service provider customers from cybersecurity offerings and enterprise customers from service assurance offerings.

Service. The 0.3%, or $0.4 million, increase in service revenue compared with the same period last year was primarily due to an increase in revenue from maintenance contracts as well as cloud and subscription services.

Table of Contents

Product. The 34%, or $32.3 million, increase in product revenue compared with the same period last year was primarily due to an increase in revenue from both enterprise customers and service provider customers from both cybersecurity and service assurance offerings, including the acceleration of a large service provider order previously expected in the fourth quarter of fiscal year 2025.

Service. The 1%, or $1.6 million, increase in service revenue compared with the same period last year was primarily due to an increase in revenue from maintenance contracts.

Total revenue by geography was as follows:

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
United States	$	~~153~~100,~~875~~504	6154	%	$	~~123~~99,~~732~~949	57	%	$	~~30,143~~555	241	%
International:
Europe	4630,~~619~~714		1916		4531,~~363~~394		2118		~~1,256~~(680)		3(2)	%
Asia	1815,~~237~~050		78		1711,~~257~~890		87		~~980~~3,160		627	%
Rest of the world	3340,~~288~~479		1322		31,~~720~~332		1418		19,~~568~~147		529	%
Subtotal international	9886,~~144~~243		3946		9474,~~340~~616		43		311,~~804~~627		416	%
Total revenue	$	~~252~~186,~~019~~747	100	%	$	~~218~~174,~~072~~565	100	%	$	3312,~~947~~182	167	%

United States revenue increased 241%, or $300.16 million, primarily due to an increase in revenue from enterprise customers from both service ~~provider~~assurance and ~~enterprise~~cybersecurity offerings, partly offset by a decrease in revenue from service provider customers from both service assurance and cybersecurity offerings. The 416%, or $311.86 million, increase in international revenue compared with the same period last year was primarily driven by an increase in revenue from ~~both~~ service provider ~~and enterprise~~ customers from cybersecurity offerings, ~~including~~and ~~the~~an ~~acceleration~~increase ~~of a large service provider order previously expected in the fourth quarter of fiscal year 2025, partially offset by a decrease in revenue~~ from ~~service~~enterprise ~~provider~~ customers from service assurance offerings.

Total revenue by product line was as follows:

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Revenue:
Service assurance	$	~~162~~118,~~845~~330	6563	%	$	~~148~~116,~~906~~733	6867	%	$	131,~~939~~597	91	%
Cybersecurity	8968,~~174~~417		3537		6957,~~166~~832		3233		2010,~~008~~585		2918	%
Total revenue	$	~~252~~186,~~019~~747	100	%	$	~~218~~174,~~072~~565	100	%	$	3312,~~947~~182	167	%

The 91%, or $131.96 million, increase in revenue from the service assurance product line was due to an increase in product revenue from ~~both~~ enterprise customers ~~and service provider customers~~, ~~including~~partially ~~the~~offset ~~acceleration~~by of a ~~large~~decrease ~~service provider order previously expected~~ in ~~the~~both ~~fourth~~product ~~quarter of fiscal year 2025,~~ and ~~an increase in~~ service revenue from service provider customers~~, partially offset by a decrease in service revenue from enterprise customers~~. The 2918%, or $2010.06 million, increase in revenue from the cybersecurity product line was due to higher product revenue from both enterprise and service provider customers, and an increase in service revenue from both enterprise customers, ~~partially~~and ~~offset by a decrease in~~ service ~~revenue from service~~ provider customers.

Table of Contents

Total revenue by customer vertical was as follows:

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Revenue:
Service provider	$	~~118~~75,~~654~~969	4741	%	$	9780,~~141~~475	4546	%	$	21(4,~~513~~506)	22(6)	%
Enterprise	~~133~~110,~~365~~778		5359		~~120~~94,~~931~~090		5554		1216,~~434~~688		1018	%
Total revenue	$	~~252~~186,~~019~~747	100	%	$	~~218~~174,~~072~~565	100	%	$	3312,~~947~~182	167	%

The 226%, or $214.5 million, ~~increase~~decrease in revenue from the service provider customer vertical was due to ana ~~increase~~decrease in product and service revenue from the service assurance product line, ~~including~~partially ~~the~~offset ~~acceleration~~by ~~of a large service provider order previously expected in the fourth quarter of fiscal year 2025, and~~ an increase in ~~product~~both ~~revenue from the cybersecurity~~ product ~~line. The 10%, or $12.4 million, increase in revenue from the enterprise customer vertical was due to an increase in product~~ and service revenue from the cybersecurity product line and an increase in product revenue from the service assurance product line, partially offset by a decrease in service revenue from the service assurance product line.

Table of Contents

from the cybersecurity product line. The 18%, or $16.7 million, increase in revenue from the enterprise customer vertical was due to an increase in product and service revenue from both the service assurance and cybersecurity product line.

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
	December 31,
	June 30,
	(Dollars in Thousands)
	2024					2023
	2025					2024
				% ofRevenue					% ofRevenue		$		%
Cost of revenue
Product	$	1611,~~362~~925		6	%	$	1512,~~251~~004		7	%	$	~~1,111~~(79)	7(1)	%
Service	3031,~~250~~497			1217		2832,~~373~~365			1319		~~1,877~~(868)		7(3)	%
Total cost of revenue	$	4643,~~612~~422		1823	%	$	4344,~~624~~369		2026	%	$	~~2,988~~(947)	7(2)	%
Gross profit:
Product $	$	~~111~~61,~~813~~068		4433	%	$	8049,~~581~~165		3728	%	$	3111,~~232~~903	3924	%
Product gross profit %	8784		%			8480		%
Service $	$	9382,~~594~~257		3744	%	$	9381,~~867~~031		4346	%	$	~~(273)~~1,226	—2	%
Service gross profit %	7672		%			7771		%
Total gross profit $	$	~~205~~143,~~407~~325				$	~~174~~130,~~448~~196				$	3013,~~959~~129	1810	%
Total gross profit %	8277		%			8075		%

Product. The 71%, or $10.1 million, ~~increase~~decrease in cost of product revenue for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to a $10.46 million ~~increase~~decrease in ~~costs related to~~ the ~~delivery~~amortization of ~~radio~~intangible ~~frequency propagation modeling projects~~assets, ~~and~~ a $10.32 million ~~increase~~decrease in ~~direct~~depreciation ~~material~~and ~~costs. These increases were partially offset by~~ a $0.81 million decrease in ~~the~~inventory ~~amortization~~obsolescence ~~of intangible assets~~charges, ~~and~~offset aby $0.68 million ~~decrease~~increase in ~~inventory~~direct ~~obsolescence~~material ~~charges~~costs. The product gross profit percentage increased by ~~three~~24 percentage points to 8784% during the three months ended ~~December~~June 3130, ~~2024~~2025 as compared with the three months ended ~~December~~June 3130, ~~2023~~2024. The 3924%, or $3111.29 million, increase in product gross profit iswas attributable to the 3419%, or $3211.38 million, increase in product revenue, ~~partially~~and ~~offset~~ by the 71%, or $10.1 million, ~~increase~~decrease in cost of product revenue.

Service. The 73%, or $10.9 million, ~~increase~~decrease in cost of service revenue for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to a $1.36 million ~~increase~~decrease in employee-related costs associated with ana ~~increase~~reduction in ~~variable~~headcount. ~~incentive~~The ~~compensation~~decrease in cost of service revenue was partially offset by aan ~~decrease~~increase of $0.8 million in the cost ~~due~~of materials used to asupport ~~reduction~~customers inunder ~~headcount~~service contracts. The service gross profit percentage ~~decreased~~increased by ~~one~~two percentage ~~point~~points to 7672% during the three months ended ~~December~~June 3130, ~~2024~~2025 as compared with the three months ended June 30, 2024. The $1.2 million increase in service gross profit was attributable to the 3%, or $0.9 million, decrease in cost of service revenue and by a $0.4 million increase in service revenue.

31Gross profit. Our gross profit increased by 10%, or $13.1 million, during the three months ended June 30, 2025 when compared with the three months ended June 30, 2024. This increase was attributable to the increase in revenue of 7%, or $12.2 million and the 2%, or $0.9 million, decrease in cost of revenue. The gross profit percentage increased by two percentage points to 77% for the three months ended June 30, 2025 as compared with the three months ended June 30, 2024.

Table of Contents

compared with the three months ended December 31, 2023. The $0.3 million decrease in service gross profit is attributable to the 7%, or $1.9 million, increase in cost of service revenue, partially offset by the 1%, or $1.6 million increase in service revenue.

Gross profit. Our gross profit increased 18%, or $31.0 million, during the three months ended December 31, 2024 when compared with the three months ended December 31, 2023. This increase is attributable to the increase in revenue of 16%, or $33.9 million, partially offset by the 7%, or $3.0 million, increase in cost of revenue. The gross profit percentage increased by two percentage points to 82% for the three months ended December 31, 2024 as compared with the three months ended December 31, 2023.

Operating Expenses

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Research and development	$	3739,~~753~~789	1521	%	$	3742,~~023~~465	1724	%	$	~~730~~(2,676)	2(6)	%
Sales and marketing	6970,~~933~~595		2838		6970,~~124~~330		3240		~~809~~265		1—	%
General and administrative	2327,~~484~~857		915		2325,~~109~~581		1015		~~375~~2,276		29	%
Amortization of acquired intangible assets	11,~~601~~119		56		1211,~~533~~614		67		(~~932~~495)		(74)	%
Restructuring charges	~~923~~529		—		—16,563		—9		~~923~~(16,034)		~~100~~(97)	%
Goodwill impairment	—		—		~~167~~426,~~106~~967		77245		(~~167~~426,~~106~~967)		(100)	%
Total operating expenses	$	~~143~~149,~~694~~889	5780	%	$	~~308~~593,~~895~~520	~~142~~340	%	$	(~~165~~443,~~201~~631)	(5375)	%

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 26%, or $02.7 million, ~~increase~~decrease in research and development expenses for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to a $12.15 million ~~increase~~decrease in employee-related costs associated with ~~an increase in variable incentive compensation partially offset by~~ a decrease in ~~cost due to a reduction in~~ headcount~~, and a $0~~.5 ~~million increase in allocated overhead. These increases were partially offset by a $0.5 million decrease from 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 10.4%, or $0.83 million, increase in total sales and marketing expenses for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to a $21.65 million increase in commissions expense,. ~~and~~This increase was partially offset by a $10.25 million ~~increase~~decrease ~~related~~in toadvertising ~~trade shows~~expenses, ~~user conferences and other events~~$0.4 ~~These~~million ~~increases~~decrease ~~were~~in ~~partially~~trade ~~offset~~shows byand a $20.13 million decrease in employee-related costs associated with a decrease in cost due to a reduction in headcount~~, and a $0~~.~~7 million decrease in advertising expense.~~

General and administrative. General and administrative expenses consist primarily of personnel expenses for executive, financial, legal and human resource employees, overhead and other corporate expenditures.

The 29%, or $02.43 million, increase in general and administrative expenses for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to a $1.30 million increase in ~~employee-related~~salary ~~costs~~expense associated with anthe cost of the one-year Senior Advisor roles of our retiring Chief Financial Officer and Chief Operating Officer that commenced on June 1, 2025, a $0.7 million increase in legal expenses, a $0.6 million increase in software licenses and maintenance expenses and a $0.6 million increase in contractor expenses. This increase was partially offset by a decrease of $0.5 million in variable incentive compensation. expense.

Amortization of acquired intangible assets. Amortization of acquired intangible assets consists primarily of amortization of customer relationships, definite-lived trademarks and trade names, and developed technology related to our acquisitions of Danaher Corporation's communications business (Comms Transaction), Network General Corporation, Avvasi Inc. and Efflux Systems, Inc.

The 74%, or $0.95 million, decrease in amortization of acquired intangible assets was largely due to a decrease in the amortization of intangible assets acquired as part of the Comms Transaction and the Network General Corporation transaction.

32Restructuring charges. During the third quarter of fiscal year 2025, 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 June 30, 2025, we recorded restructuring charges totaling $0.5 million. During the three months ended June 30, 2024, we recorded restructuring charges totaling $16.6 million related to one-time termination benefits for one hundred sixteen employees who voluntarily terminated their employment through our voluntary separation program that was implemented in the first quarter of fiscal year 2025.

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.

Table of Contents

~~Restructuring~~Accordingly, ~~charges.~~we ~~During~~conducted ~~the~~an ~~first~~interim ~~quarter~~quantitative ofimpairment ~~fiscal~~test ~~year~~of ~~2025,~~its wegoodwill ~~implemented~~at aJune ~~voluntary~~30, ~~separation~~2024 ~~program~~using ~~(VSP)~~the ~~for~~market ~~employees~~approach ~~who~~to ~~met~~estimate ~~certain~~the ~~age~~fair ~~and~~value ~~service~~of ~~requirements~~its toreporting ~~reduce overall headcount~~unit. As a result of ~~the~~that ~~related~~interim ~~workforce~~impairment ~~reduction~~test, ~~during the three months ended December 31, 2024,~~ we recorded ~~additional~~a ~~restructuring charges totaling~~ $0427.60 million ~~related~~goodwill toimpairment ~~one-time~~charge ~~termination benefits for three employees who voluntarily terminated their employment with us~~ during the three months ended ~~December~~June 3130, 2024. During the third quarter of fiscal year 2025, 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 the related workforce changes, during the three months ended December 31, 2024, we recorded restructuring charge totaling $0.3 million.~~

~~Goodwill~~ ~~impairment.~~The Askey aassumption ~~result~~in ofthe amarket ~~sustained~~approach ~~decline~~was inthe ~~our~~company-specific ~~stock~~control ~~price~~premium, ~~and~~which ~~overall~~was ~~market~~estimated ~~capitalization~~using ~~during~~expected ~~the~~synergies ~~third~~that ~~quarter~~would ofbe ~~fiscal~~realized ~~year~~by ~~2024,~~a ~~along~~hypothetical ~~with~~buyer. ~~other~~We ~~qualitative~~also ~~considerations~~compared ~~including~~ the ~~continued~~implied ~~impact~~control ~~from~~premium ~~the~~to ~~conditions~~recent control premiums paid in the ~~macroeconomic environment~~industry, itas evidenced by guideline public company comparable transactions. This information corroborated that the company-specific control premium was ~~determined~~within athe ~~triggering~~range ~~event~~of ~~occurred,~~premiums ~~indicating~~for ~~goodwill~~other ~~may~~companies beoperating ~~impaired~~in the industry. ~~Accordingly,~~Changes wein ~~conducted~~the aestimates or assumptions used in its quantitative impairment test could materially affect the determination of ~~our~~fair ~~goodwill~~value atand ~~December~~the ~~31,~~associated ~~2023~~goodwill impairment assessment. WePotential ~~estimated~~events ~~the~~and ~~implied~~circumstances ~~fair~~that ~~value~~could ofhave ~~our~~an ~~goodwill~~adverse ~~using~~impact aon ~~market~~our ~~approach.~~estimates Asand aassumptions ~~result~~include, ofbut ~~the~~are ~~quantitative~~not ~~impairment~~limited ~~test~~to, wecontinued ~~determined~~increases ~~goodwill~~in ~~was~~costs, ~~impaired~~and high interest rates and ~~recorded~~other amacroeconomic ~~goodwill~~factors. ~~impairment~~An ~~charge~~increase or decrease of ~~$167.~~1% ~~million~~in the company-specific control premium used in the determination of the fair value of the reporting unit under the market approach would have resulted in an increase or decrease in the goodwill impairment recorded during the three months ended ~~December~~June 3130, ~~2023~~2024 of approximately $13.0 million.

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
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Interest and other income (expense), net	$	(43,~~338)~~736	(2)	%	$	~~729~~9,628	—6	%	$	(5,~~067~~892)	(~~695~~61)	%

The ~~695~~61%, or $5.19 million, ~~change~~decrease in interest and other income (expense), net for the three months ended ~~December~~June 3130, ~~2024~~2025 compared to the same period last year was primarily due to $65.02 million decrease from the change in fair value of the equity investment in Napatech and a $2.3 million increase in foreign exchange expense, partially offset by a $01.74 million decrease in ~~foreign~~interest ~~exchange~~ expense.

Income Tax Expense (Benefit). The effective tax rates were 1430.91% and 02.93% for the three months ended ~~December~~June 3130, ~~2024~~2025 and ~~2023~~2024, respectively. The effective tax rate for the three months ended ~~December~~June 3130, ~~2024~~2025 differed from the effective tax rate for the three months ended ~~December~~June 3130, ~~2023~~2024, primarily related to a decrease in foreign withholding taxes offset by a $427.0 million goodwill impairment charge incurred during the ~~research~~three ~~and~~months ~~development~~ended ~~tax~~June ~~credit~~30, ~~and~~2024 anwhich ~~increase~~was innot ~~foreign~~deductible ~~withholding~~for ~~taxes~~tax purposes.

	Three Months Ended								Change
	December 31,
	June 30,
	(Dollars in Thousands)
	2024				2023
	2025				2024
			% ofRevenue				% ofRevenue		$		%
Income tax expense (benefit)	$	~~8,565~~851	3—	%	$	(110,~~141~~320)	(16)	%	$	911,~~706~~171	~~851~~108	%

Table of Contents

Nine Months Ended December 31, 2024 and 2023

Revenue

During the nine months ended December 31, 2024, one direct customer, Verizon, accounted for more than 10% of our total revenue, while no channel partners accounted for more than 10% of our total revenue. During the nine months ended December 31, 2023, no direct customers or channel partners accounted for more than 10% of our total revenue.

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Revenue:
Product	$	270,377	44	%	$	271,038	43	%	$	(661)	—	%
Service	347,315		56	%	354,974		57	%	(7,659)		(2)	%
Total revenue	$	617,692	100	%	$	626,012	100	%	$	(8,320)	(1)	%

Product. The $0.7 million decrease in product revenue compared with the same period last year was due to a decrease in revenue from both enterprise and service provider customers from service assurance offerings, as well as a decrease in revenue from service provider customers from cybersecurity offerings, partially offset by an increase in revenue from enterprise customers from cybersecurity offerings. The results for the nine months ended December 31, 2023 benefited from approximately $48 million of backlog-related revenue. Excluding backlog-related revenue, total revenue for the nine months ended December 31, 2024 compared with the same period last year would have increased year over year.

Service. The 2%, or $7.7 million, decrease in service revenue compared with the same period last year was primarily due to a decrease in revenue from maintenance contracts as well as professional service contracts.

Total revenue by geography was as follows:

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
United States	$	365,059	59	%	$	367,112	59	%	$	(2,053)	(1)	%
International:
Europe	110,107		18		111,531		18		(1,424)		(1)	%
Asia	47,163		8		47,982		7		(819)		(2)	%
Rest of the world	95,363		15		99,387		16		(4,024)		(4)	%
Subtotal international	252,633		41		258,900		41		(6,267)		(2)	%
Total revenue	$	617,692	100	%	$	626,012	100	%	$	(8,320)	(1)	%

United States revenue decreased 1%, or $2.1 million, primarily due to a decrease in revenue from service assurance offerings from enterprise customers, including radio frequency propagation modeling projects. The 2%, or $6.3 million, decrease in international revenue compared with the same period last year was primarily driven by lower revenue from service provider customers from both service assurance and cybersecurity offerings, partially offset by an increase in revenue from enterprise customers from both service assurance and cybersecurity offerings.

Table of Contents

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Revenue:
Service assurance	$	401,254	65	%	$	424,392	68	%	$	(23,138)	(5)	%
Cybersecurity	216,438		35		201,620		32		14,818		7	%
Total revenue	$	617,692	100	%	$	626,012	100	%	$	(8,320)	(1)	%

The 5%, or $23.1 million, decrease in revenue from the service assurance product line was due to a decrease in revenue from both enterprise and service provider customers, including radio frequency propagation modeling projects, and the 7%, or $14.8 million, increase in revenue from the cybersecurity product line was due to an increase in revenue from enterprise customers, partially offset by a decrease in revenue from service provider customers.

Total revenue by customer vertical was as follows:

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Revenue:
Service provider	$	266,745	43	%	$	287,440	46	%	$	(20,695)	(7)	%
Enterprise	350,947		57		338,572		54		12,375		4	%
Total revenue	$	617,692	100	%	$	626,012	100	%	$	(8,320)	(1)	%

The 7%, or $20.7 million, decrease in revenue from the service provider customer vertical was due to a decrease in product and service revenue from both the service assurance and cybersecurity product lines. The 4%, or $12.4 million, increase in revenue from the enterprise customer vertical was due to an increase in product and service revenue from the cybersecurity product line, partially offset by a decrease in the service assurance product line, including radio frequency propagation modeling projects.

Table of Contents

Cost of Revenue and Gross Profit

	Nine Months Ended										Change
	December 31,
	(Dollars in Thousands)
	2024					2023
				% ofRevenue					% ofRevenue		$		%
Cost of revenue
Product	$	41,806		7	%	$	48,006		8	%	$	(6,200)	(13)	%
Service	91,232			15		89,066			14		2,166		2	%
Total cost of revenue	$	133,038		22	%	$	137,072		22	%	$	(4,034)	(3)	%
Gross profit:
Product $	$	228,571		37	%	$	223,032		36	%	$	5,539	2	%
Product gross profit %	85		%			82		%
Service $	$	256,083		41	%	$	265,908		42	%	$	(9,825)	(4)	%
Service gross profit %	74		%			75		%
Total gross profit $	$	484,654				$	488,940				$	(4,286)	(1)	%
Total gross profit %	78		%			78		%

Product. The 13%, or $6.2 million, decrease in cost of product revenue for the nine months ended December 31, 2024 compared to the same period last year was primarily due to a $2.3 million decrease in the amortization of intangible assets, a $2.2 million decrease in direct material costs, a $0.9 million decrease in inventory obsolescence charges, a $0.9 million decrease in employee-related costs associated with the timing of certain projects, and a $0.7 million decrease in inventory related expenses. The product gross profit percentage increased by three percentage points to 85% during the nine months ended December 31, 2024 when compared to the nine months ended December 31, 2023. The 2%, or $5.5 million, increase in product gross profit is attributable to the 13%, or $6.2 million, decrease in cost of product revenue, partially offset by the $0.7 million decrease in product revenue.

Service. The 2%, or $2.2 million, increase in cost of service revenue for the nine months ended December 31, 2024 compared to the same period last year was primarily due to a $2.1 million increase in employee-related expenses largely due to an increase in variable incentive compensation as well as the timing of certain projects partially offset by a decrease in costs due to a reduction in headcount, a $0.8 million increase in contractor fees, and a $0.8 million increase in allocated overhead. The service gross profit percentage decreased by one percentage point to 74% for the nine months ended December 31, 2024 when compared to the nine months ended December 31, 2023. The 4%, or $9.8 million, decrease in service gross profit is attributable to the 2%, or $7.7 million decrease in service revenue, and the 2%, or $2.2 million, increase in cost of service revenue.

Gross profit. Our gross profit for the nine months ended December 31, 2024 decreased 1%, or $4.3 million, compared to the same period last year. This decrease is primarily attributable to the decrease in revenue of 1%, or $8.3 million, partially offset by the 3%, or $4.0 million, decrease in cost of revenue. The gross profit percentage remained flat at 78% for the nine months ended December 31, 2024 when compared to the nine months ended December 31, 2023.

Table of Contents

Operating Expenses

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Research and development	$	116,127	19	%	$	117,655	19	%	$	(1,528)	(1)	%
Sales and marketing	201,489		33		209,070		33		(7,581)		(4)	%
General and administrative	72,807		12		73,975		12		(1,168)		(2)	%
Amortization of acquired intangible assets	34,857		6		37,790		6		(2,933)		(8)	%
Restructuring charges	19,895		3		—		—		19,895		100	%
Goodwill impairment	426,967		69		167,106		27		259,861		156	%
Gain on divestiture of a business	—		—		(3,806)		(1)		3,806		100	%
Total operating expenses	$	872,142	142	%	$	601,790	96	%	$	270,352	45	%

Research and development. The 1%, or $1.5 million, decrease in research and development expenses for the nine months ended December 31, 2024 compared to the same period last year was primarily due to a $1.7 million decrease from depreciation expense, and a $0.8 million decrease in contractor fees. These decreases were partially offset by a $1.4 million increase in allocated overhead.

Sales and marketing. The 4%, or $7.6 million, decrease in sales and marketing expenses for the nine months ended December 31, 2024 compared to the same period last year was primarily due to an $8.6 million decrease in employee-related expenses largely due to a decrease in headcount, a $1.4 million decrease in advertising expense, and a $1.0 million decrease in commissions expense. These decreases were partially offset by a $4.1 million increase related to trade shows, user conferences and other events.

General and administrative. The 2%, or $1.2 million, decrease in general and administrative expenses for the nine months ended December 31, 2024 compared to the same period last year was primarily due to a $1.6 million decrease in contractor fees, a $0.9 million decrease from depreciation expense, a $0.7 million decrease in the provision for allowance for credit losses, a $0.6 million decrease in business taxes, and a $0.6 million decrease in allocated overhead. These decreases were partially offset by a $2.5 million increase in employee-related expenses largely due to an increase in variable incentive compensation, and a $1.2 million increase in legal fees.

Amortization of acquired intangible assets. Amortization of acquired intangible assets consists primarily of amortization of customer relationships, definite-lived trademark and tradenames, and developed technology related to our acquisitions of the Comms Transact, Network General Corporation, Avvasi, Inc. and Efflux Systems, Inc.

The 8%, or $2.9 million, decrease in amortization of acquired intangible assets for the nine months ended December 31, 2024 compared to the same period last year was largely due to a decrease in the amortization of intangible assets related to the Comms Transaction and Network General Corporation.

Restructuring charges. During the first quarter of fiscal year 2025, we 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 nine months ended December 31, 2024, we recorded restructuring charges totaling $19.6 million related to one-time termination benefits for one hundred forty-two employees who voluntarily terminated their employment with us during that period. During the third quarter of fiscal year 2025, 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 the related workforce changes, during the nine months ended December 31, 2024, we recorded restructuring charges totaling $0.3 million.

Goodwill impairment. During fiscal year 2024, we recorded $217.3 million in goodwill impairment charges as a result of the sustained decline in our stock price and overall market capitalization. During the first quarter of fiscal year 2025, due to the continued 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 a quantitative impairment test of our goodwill at June 30, 2024. We estimated the implied fair value of our goodwill using a market approach. As a result of the quantitative impairment test performed during the first quarter of fiscal year 2025, we determined goodwill was impaired and recorded a goodwill impairment charge of $427.0 million during the three months ended June 30, 2024. The additional impairment charge recorded

Table of Contents

in the first quarter of fiscal year 2025 was primarily due to the continued decrease in our stock price from March 31, 2024 to June 30, 2024, an increase in our weighted-average cost of capital, and the refinement to the expected cost synergies that could be realized by a hypothetical buyer as a result of the VSP we implemented in the first quarter of fiscal year 2025, which impacted the company-specific control premium used to determine the fair value of the reporting unit under the market approach. We expect that these restructuring efforts will generate net annual run-rate savings of approximately $25.0 million to $27.0 million, of which we expect that approximately $6.0 million will be realized in the remainder of fiscal year 2025. At September 30, 2024 and December 31, 2024, we performed a Triggering Event assessment and concluded no event or circumstances occurred that indicated goodwill was further impaired.

The key assumption in the market approach was the company-specific control premium, which was estimated using expected synergies that would be realized by a hypothetical buyer. We also compared its implied control premium to recent control premiums paid in the industry, as evidenced by guideline public company comparable transactions. This information corroborated that the company-specific control premium was within the range of premiums for other companies operating in the industry. Changes in the estimates or assumptions used in its quantitative impairment test could materially affect the determination of fair value and the associated goodwill impairment assessment. Potential events and circumstances that could have an adverse impact on our estimates and assumptions include, but are not limited to, continued increases in costs, and high interest rates and other macroeconomic factors. An increase or decrease of 1% in the company-specific control premium used in the determination of the fair value of the reporting unit under the market approach would have resulted in an increase or decrease in the goodwill impairment recorded during the nine months ended December 31, 2024 of approximately $13.0 million.

Gain on Divestiture of Business. During the nine months ended December 31, 2023, we recorded a $3.8 million gain on the divestiture of the Test Optimization business.

Interest and Other Income (Expense), Net

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Interest and other income (expense), net	$	3,493	1	%	$	1,272	—	%	$	2,221	175	%

The 175%, or $2.2 million, increase in interest and other income (expense), net was primarily due to a $1.6 million increase from the change in fair value of the equity investment in Napatech, and a $1.2 million increase in interest income during the nine months ended December 31, 2024, when compared to the nine months ended December 31, 2023.

	Nine Months Ended								Change
	December 31,
	(Dollars in Thousands)
	2024				2023
			% ofRevenue				% ofRevenue		$		%
Income tax expense	$	1,544	—	%	$	3,737	1	%	$	(2,193)	(59)	%

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 June 30, 2025 was $30.9 million compared to $33.1 million at March 31, 2025. Combined product backlog included fulfillable backlog of $23.3 million and $25.1 million at June 30, 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

3830

Table of Contents

to, changes in timing of customer projects and product delivery schedules, which may not be within our control. Our total combined product backlog at December 31, 2024 was $29.9 million compared to $6.8 million at March 31, 2024. Combined product backlog included fulfillable backlog of $21.8 million and $2.5 million at December 31, 2024 and March 31, 2024, respectively. Total backlog includes orders that were received late in the quarter and radio frequency propagation modeling projects. In some cases, we have begun these projects but have not yet hit billable milestones. At ~~December~~June 3130, ~~2024~~2025 and March 31, ~~2024~~2025 deferred revenue contained a gross balance of $36.23 million and $18.23 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):

	December 31,2024		March 31,2024
	June 30,2025		March 31,2025
Cash and cash equivalents	$	~~398~~489,~~361~~572	$	~~389~~457,~~674~~415
Short-term marketable securities and investments	2842,~~536~~937		3334,~~459~~058
Long-term marketable securities	110,~~015~~997		~~994~~1,004
Cash, cash equivalents, marketable securities and investments	$	~~427~~543,~~912~~506	$	~~424~~492,~~127~~477

Cash, cash equivalents, marketable securities and investments

At ~~December~~June 3130, ~~2024~~2025, cash, cash equivalents, marketable securities and investments (current and non-current) totaled $~~427~~543.95 million, a $351.80 million increase from $~~424~~492.15 million at March 31, ~~2024~~2025. This increase was primarily due to $7673.16 million of net cash provided by operations, ~~partially~~and ~~offset by~~ $2513.36 million ~~used~~proceeds tofrom ~~repurchase~~sales ~~shares~~and maturity of ~~our~~marketable ~~common stock~~securities, partially offset by $2529.0 million used to ~~repay~~purchase ~~long-term~~marketable ~~debt~~securities, $1315.80 million used ~~for~~to ~~tax~~repurchase ~~withholdings~~shares onof ~~restricted~~our ~~stock~~common ~~units~~stock, $413.08 million used for ~~capital~~tax ~~expenditures,~~withholdings ~~$2.5~~on ~~million~~restricted ~~used~~stock ~~for the payment of debt issuance costs~~units, and $1.39 million used tofor ~~acquire~~capital ~~technology~~expenditures, ~~licenses~~ during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025. Cash and short-term investments held outside of the United States was approximately $~~180~~227.57 million.

Cash and cash equivalents were impacted by the following:

	Nine Months Ended
	Three Months Ended
	December 31,
	June 30,
	(in thousands)
	2024		2023
	2025		2024
Net cash provided by (used in) operating activities	$	76,149	$	(34,767)
Net cash provided by operating activities	$	73,552	$	38,428
Net cash provided by investing activities	$	2,041	$	13,429
Net cash used in investing activities	$	(17,291)	$	(3,094)
Net cash used in financing activities	$	(6628,~~534~~778)	$	(6962,~~148~~157)

Net cash from operating activities

Cash provided by operating activities was $7673.16 million during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, compared with $3438.84 million of cash ~~used~~provided inby operating activities during the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024. The $~~110~~35.91 million ~~change~~increase was ~~due~~primarily indriven ~~part~~by to a $~~259~~439.97 million ~~increase~~decrease ~~from~~in ~~goodwill~~net ~~impairment~~loss ~~charges~~related ~~recorded during the nine months ended December 31, 2024 as compared~~ to ~~the nine months ended December 31, 2023,~~ a ~~$55.4~~reduction ~~million~~of ~~increase from accounts receivable, a~~ $55427.30 million ~~increase~~in ~~from accrued compensation and other expenses,~~ a ~~$13.3~~goodwill ~~million~~impairment ~~increase from prepaid expenses and other assets, a $3~~charge.8 ~~million~~Also ~~increase~~contributing ~~related~~ to the ~~gain recorded in the nine months ended December 31, 2023 for the divestiture of a business, a $3.3 million~~ increase ~~from~~was ~~deferred income taxes,~~ a $228.31 million increase ~~from~~due ~~income~~to ~~taxes~~change ~~payable,~~in ~~a $1.4 million increase from~~ deferred revenue, a $110.16 million increase ~~from~~associated ~~the~~with ~~loss~~deferred onincome ~~extinguishment of debt~~tax, and a $09.51 million increase from accounts ~~payable~~receivable. ~~These~~Partially ~~increases~~offsetting ~~were~~these ~~partially~~increases ~~offset~~was by a $~~270~~18.29 million decrease ~~from~~associated ~~the~~with ~~change~~accrued incompensation ~~net loss, an $8.7 million decrease from depreciation~~ and ~~amortization~~other ~~expense~~expenses, a $45.14 million decrease associated with change from ~~share-based~~accounts ~~compensation~~payable, a $15.23 million ~~decrease~~decreased ~~from~~related ~~the~~to a change in ~~the~~prepaid ~~fair~~expenses ~~value of an equity investment,~~ and aother ~~$0.8~~assets ~~million~~for ~~decrease from inventories during~~ the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025 as compared with the ~~nine~~three months ended ~~December~~June 3130, ~~2023~~2024.

Table of Contents

Net cash from investing activities

	Nine Months Ended
	Three Months Ended
	December 31,
	June 30,
	(in thousands)
	2024		2023
	2025		2024
Cash provided by investing activities included the following:
Cash used in investing activities included the following:
Purchase of marketable securities and investments	$	(29,~~348~~031)	$	(4312,~~159~~151)
Proceeds from sales and maturity of marketable securities	3613,~~688~~618		5310,~~569~~325
Purchase of fixed assets	(41,~~009~~878)		(41,~~747~~268)
Purchase of intangible assets	(1,290)		—
	$	(17,291)	$	(3,094)
Proceeds from divestiture of a business	—		7,766
	$	2,041	$	13,429

~~Cash provided by investing activities was $2.0 million during the nine months ended December~~ 31, 2024, compared with $13.4 million of cash provided by investing activities during the nine months ended December 31, 2023. The $11.4 million decrease in cash provided by investing activities was due in part to a $7.8 million decrease in proceeds due to the divestiture of the Test Optimization business during the nine months ended December 31, 2023, a $3.1 million net decrease in cash inflow from the purchase and sale of marketable securities during the nine months ended December 31, 2024 when compared with the nine months ended December 31, 2023, and $1.3 million in cash used to acquire technology licenses during the nine months ended December 31, 2024. These decreases to cash were partially offset by a $0.7 million decrease in cash used to purchase fixed assets during the nine months ended December 31, 2024, compared with the nine months ended December 31, 2023.

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 2025.

Net cash from financing activities

	Nine Months Ended
	December 31,
	(in thousands)
	2024		2023
Cash used in financing activities included the following:
Issuance of common stock under stock plans	$	2	$	3
Treasury stock repurchases	(25,257)		(50,000)
Tax withholding on restricted stock units	(13,829)		(19,151)
Payment of debt issuance costs	(2,450)		—
Repayment of long-term debt	(100,000)		—
Proceeds from issuance of long-term debt	75,000		—
	$	(66,534)	$	(69,148)

Cash used in financing activities changed by $2.6 million to $66.5 million during the nine months ended December 31, 2024, compared with $69.1 million of cash used in financing activities during the nine months ended December 31, 2023.

During the nine months ended December 31, 2024, we repurchased a total of 1,362,205 shares for $25.3 million in the open market under the 2022 Share Repurchase Program. During the nine months ended December 31, 2023, we repurchased a total of 1,209,153 shares for $33.6 million in the open market under the 2017 Share Repurchase Program, and 614,516 shares for $16.4 million in the open market under the 2022 Share Repurchase Program.

In connection with the delivery of our common stock upon vesting of restricted stock units, we withheld 697,899 and 644,125 shares at a cost of $13.8 million and $19.2 million related to minimum statutory tax withholding requirements on these restricted stock units during the nine months ended December 31, 2024 and 2023, 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.

Table of Contents

~~During~~Cash used in investing activities was $17.3 million during the ~~nine~~three months ended ~~December~~June 3130, ~~2024~~2025, wecompared ~~repaid~~with $253.01 million of ~~borrowings~~cash ~~under~~used in investing activities during the ~~Second~~three ~~Amended~~months ended June 30, 2024. The $14.2 million increase in cash used in investing activities was partially due in part to an additional $16.9 million purchase and ~~Restated~~sale ~~Credit~~of ~~Agreement~~marketable securities during the three months ended June 30, 2025 as compared with the three months ended June 30, 2024, an additional $0.6 million in fixed asset purchase, partially offset by a $3.3 million increase in proceeds from maturity of marketable securities in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

~~During~~Our ~~the~~investments ~~nine~~in ~~months~~property ~~ended~~and ~~December~~equipment 31consist primarily of computer equipment, ~~2024~~demonstration units, weoffice ~~paid~~equipment ~~$2.5~~and ~~million~~facility inimprovements. ~~debt~~We ~~issuance~~plan ~~costs~~to ~~related~~continue to ~~the~~invest ~~execution~~in ofcapital expenditures to support our ~~Third~~infrastructure ~~Amended~~through ~~and~~the ~~Restated~~remainder ~~Credit~~of ~~Agreement~~fiscal year 2026.

Net cash from financing activities


	Three Months Ended
	June 30,
	(in thousands)
	2025		2024
Cash used in financing activities included the following:
Issuance of common stock under stock plans	$	1	$	2

Treasury stock repurchases	(15,014)		(25,000)
Tax withholding on restricted stock units	(13,765)		(12,159)
Repayment of long-term debt	—		(25,000)


	$	(28,778)	$	(62,157)

Cash used in financing activities changed by $33.4 million to $28.8 million during the three months ended June 30, 2025, compared with $62.2 million of cash used in financing activities during the three months ended June 30, 2024.

During the three months ended June 30, 2025, we repurchased a total of 761,249 shares for $15.0 million in the open market under the 2022 Share Repurchase Program. During the three months ended June 30, 2024, we repurchased a total of 1,347,900 shares for $25.0 million in the open market under the 2022 Share Repurchase Program.

In connection with the delivery of our common stock upon vesting of restricted stock units, we withheld 597,115 and 617,826 shares at a cost of $13.8 million and $12.2 million related to minimum statutory tax withholding requirements on these restricted stock units during the three months ended June 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 three months ended June 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 three months ended June 30, 2024, we repaid $25.0 million of borrowings under the Second Amended and Restated Credit Agreement (as defined below).

Sources of Cash and Cash Requirements

Credit Facility

On July 27, 2021, we amended and extended our 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 were due on that date. On May 13, 2024, we repaid $25.0 million of borrowings under the Second Amended and Restated Credit Agreement.

On October 4, 2024, we 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: us, 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. We may elect to use the amended credit facility for working capital and other general corporate purposes (including to ~~refinance revolving loans outstanding under the Second Amended and Restated Credit Agreement and to~~ repurchase of 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 three and nine months ended December 31, 2024. At December 31, 2024, $75.0 million was outstanding under the Third Amended and Restated Credit Agreement. On February 3, 2025, we paid the outstanding balance of $75.0 million in full under the Third Amended and Restated Credit Agreement.32

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 initial period until we have delivered financial statements for the quarter ended December 31, 2024, 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 will accrue on the daily unused amount of the credit facility. For the initial period until we have delivered financial statements for the quarter ended December 31, 2024, 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 3.50 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.

Table of Contents

~~term~~under ~~SOFR~~the ~~loans.~~Third ~~Additionally,~~Amended weand ~~will~~Restated ~~pay~~Credit aAgreement ~~fronting~~will ~~fee~~expire toon ~~each~~October ~~issuing~~4, ~~bank~~2029, inand ~~amounts~~any tooutstanding beloans ~~agreed~~will tobe ~~between~~due uson ~~and~~that ~~the applicable issuing bank~~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 June 30, 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 year ended March 31, 2025, until we have delivered financial statements for the quarter ended June 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.

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 March 31, 2025, until we have delivered financial statements for the quarter ended June 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) ~~are~~ 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 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 December 31, 2024, we were in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.33

Table of Contents

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 June 30, 2025, we were in compliance with all covenants, including the specified total consolidated net leverage ratio range of 4.00 to 1.00.

We had unamortized capitalized debt issuance costs, net of $3.1 million at ~~December~~June 3130, ~~2024~~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 $2.4 million was included as other assets in our consolidated balance sheet at ~~December~~June 3130, ~~2024~~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 long-term debt, 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 ~~filed on Form 10-K~~. 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, to repay borrowings under our Third Amended and Restated Credit Agreement, 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.

Table of Contents

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.

4334

Table of Contents

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. Atas ~~December 31, 2024,~~ we ~~owed~~had ~~$75.0~~no ~~million on this loan with an interest rate of 5.44%. A sensitivity analysis was performed on the outstanding portion of our~~ debt ~~obligation~~ as of ~~December 31,~~June ~~2024. Should the current weighted-average interest rate increase or decrease by 10%~~30, ~~the resulting annual increase or decrease to interest expense would be approximately $0~~2025.~~4 million as of December 31, 2024.~~

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 ~~December~~June 3130, ~~2024~~2025, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $1011.39 million. The valuation of outstanding foreign currency forward contracts at ~~December~~June 3130, ~~2024~~2025 resulted in a liability balance of $~~324~~28 thousand, reflecting unfavorable contract rates in comparison to current market rates at this date. At March 31, ~~2024~~2025, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $1110.76 million. The valuation of outstanding foreign currency forward contracts at March 31, ~~2024~~2025 resulted in a liability balance of $7455 thousand, reflecting unfavorable contract rates in comparison to current market rates and an asset balance of $11197 thousand, reflecting favorable rates in comparison to current market rates at this date. 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 ~~December~~June 3130, ~~2024~~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 ~~Securities~~ Exchange Act ~~of 1934, as amended (Exchange Act))~~. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, at ~~December~~June 3130, ~~2024~~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 ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

4435

Table of Contents

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, ~~the~~none ~~amount~~ of ~~ultimate~~the ~~expense~~Company’s ~~with respect to any~~ current legal proceedings and claims, if determined adversely, ~~will~~and ~~not~~based ~~have~~on athe ~~material~~information ~~adverse~~known ~~effect~~to onthe ~~our~~management ~~financial~~as ~~condition, results~~ of ~~operations~~the ordate ~~cash~~of ~~flows.~~this ~~For~~Quarterly ~~additional information regarding our legal proceedings~~Report, ifis ~~any,~~expected ~~see Note 14 contained in the "Notes~~ to ~~Consolidated~~have ~~Financial~~a ~~Statements"~~material ~~included~~adverse ineffect ~~Part I of this Quarterly Report~~ on ~~Form~~our ~~10-Q~~financial condition, ~~which~~results isof ~~incorporated~~operations ~~herein~~or bycash ~~reference~~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 ~~on Form 10-K for our fiscal year ended March 31, 2024~~. The risks discussed in our Annual Report ~~on Form 10-K~~ could materially affect our business, financial condition and future results. There have been no material changes to those risk factors since we filed our Annual Report ~~on Form 10-K~~. The risks described in our Annual Report ~~on Form 10-K~~ 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.

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 June 30, 2025 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act:

Period	Total Numberof SharesPurchased (1)	Average PricePaid per Share		Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs	Maximum Number of Shares That MayYet be PurchasedUnder the Program
10/1/2024-10/31/2024	14,293	$	20.73	—	23,023,279
4/1/2025-4/30/2025	742,923	$	19.66	742,670	22,280,609
11/1/2024-11/30/2024	1,414	20.76		—	23,023,279
5/1/2025-5/31/2025	149,487	22.70		18,579	22,262,030
12/1/2024-12/31/2024	229	21.65		—	23,023,279
6/1/2025-6/30/2025	465,954	23.14		—	22,262,030
Total	151,~~936~~358,364	$	2021.7419	—761,249	2322,~~023~~262,~~279~~030

(1)We purchased an aggregate of 15597,~~936~~115 shares during the three months ended ~~December~~June 3130, ~~2024~~2025 transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. Such purchases reflected in the table do not reduce the maximum number of shares that may be purchased under our 25 million share repurchase program authorized on May 3, 2022 (2022 Share Repurchase Program).

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

4536

Table of Contents

Item 5. Other Information

Insider Adoption or Termination of Trading Arrangements:

During the fiscal quarter ended ~~December~~June 3130, ~~2024~~2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contracts, instructions or written plans for the purchase or sale of our securities, 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

Jean Bua, Chief Financial Officer

November 12, 2024

Rule 10b5-1 Trading Arrangement

Up to 11,999 shares to be sold

March 6, 2025

N/A

Michael Szabados, Director and Senior Advisor 3

May 23, 2025

Rule 10b5-1 Trading Arrangement

Up to 16,000 shares to be sold

May 20, 2026

N/A

John Downing, Executive Vice President, Worldwide Sales Operations

November 22, 2024

Rule 10b5-1 Trading Arrangement

Up to 24,000 shares to be sold

February 27, 2026

N/A

Alfred Grasso, Director

December 3, 2024

Rule 10b5-1 Trading Arrangement

Up to 11,000 shares to be sold

November 25, 2025

N/A

Joseph G. Hadzima Jr., Director

December 11, 2024

Rule 10b5-1 Trading Arrangement

Up to 10,113 shares to be sold

December 15, 2025

N/A

(1) Except as indicated by footnote, 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.

46(3) Mr. Szabados served as our Chief Operating Officer until May 31, 2025, when he resigned from that position.

Table of Contents

Item 6. Exhibits

(a)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		Transition and Separation Agreement, dated May 7, 2025 by and between the Company and Jean Bua (filed as Exhibit 10.8 to NetScout's Annual Report on Form 10-K, SEC File No. 000-26251, filed on May 15, 2025 and incorporated herein by reference).

10.2		Transition and Separation Agreement, dated May 7, 2025 by and between the Company and Michael Szabados (filed as Exhibit 10.9 to NetScout's Annual Report on Form 10-K, SEC File No. 000-26251, filed on May 15, 2025 and incorporated herein by reference).

10.3		Offer Letter, dated May 7, 2025, by and between the Company and Anthony Piazza (filed as Exhibit 10.10 to NetScout's Annual Report on Form 10-K, SEC File No. 000-26251, filed on May 15, 2025 and incorporated herein by reference).

10.4		Offer Letter, dated May 7, 2025, by and between the Company and Sanjay Munshi (filed as Exhibit 10.11 to NetScout's Annual Report on Form 10-K, SEC File No. 000-26251, filed on May 15, 2025 and incorporated herein by reference).

10.5	+	Form of Restricted Stock Unit Award Agreement with respect to the NetScout Systems, Inc. 2019 Equity Incentive Plan.

10.6	+	Form of Performance-Based Restricted Stock Unit Award with respect to the NetScout Systems, Inc. 2019 Equity Incentive Plan.

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).

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		Third Amendment and Restatement Agreement, dated as of October 4, 2024, to the Second Amended and Restated Credit Agreement, dated as of July 27, 2021, by and among NetScout Systems, Inc., as borrower; certain subsidiaries of NetScout Systems, Inc., as loan parties; the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent attaching the Third Amended and Restated Credit Agreement, dated as of October 4, 2024, by and among 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 (filed as Exhibit 10.1 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on October 4, 2024).
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		The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2024 formatted in Inline XBRL



+			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.

4738

Table of Contents

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: February 6, 2025						/s/ Anil K. Singhal
Date: August 7, 2025						/s/ Anil K. Singhal
						Anil K. Singhal
						President, Chief Executive Officer and Chairman
						(Principal Executive Officer)
Date: February 6, 2025						/s/ Jean Bua
Date: August 7, 2025						/s/ Anthony Piazza
						Jean Bua
						Anthony Piazza
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)
Date: August 7, 2025						/s/ Eric Watt
						Eric Watt
						Chief Accounting Officer
						(Principal Accounting Officer)

4839

Filing Compare · NETSCOUT SYSTEMS INC