• Total revenue grew 7% sequentially, and grew 7% over fourth quarter FY 2001. Product revenue grew 8% sequentially, and is up 15% over fourth quarter FY 2001. Service revenue grew 12% sequentially, and is up 17% over fourth quarter FY 2001.
• Gross margin remained at 74% sequentially and is up 1% over fourth quarter FY 2001.
• Pro forma operating margin was 3% of revenues in the fourth quarter.
• Cash and all marketable securities increased by $6.5 million in the fourth quarter to $69.3 million.
• 40 new customers worldwide in the fourth quarter and 180 for the year.
• Sales to repeat customers were approximately 90% of revenue in the fourth quarter.
• 50 large deals valued over $100,000 in the fourth quarter.
• Direct sales represented 46% of total revenue; reseller revenue represented 54% of total revenue, including Cisco-channeled sales, which accounted for 14% of total revenue in the fourth quarter.
• Added 27 new channel partners for the year, with emphasis on building international presence.
• International business comprised approximately 19% of total revenue in the fourth quarter.
• Competitive wins totaled over $4 million in the fourth quarter, involving approximately 30 deals against other leading network management vendors.

• Launched nGenius Real Time Monitor(TM) 1.3 with faster retrieval of traffic data and smarter data reduction.
• Launched nGenius Capacity Planner(TM) 3.0 and nGenius Application Service Level Manager(TM) 3.0 with improved, easy-to-read customized reporting including options for web-based distribution.
• Expanded partnership with OpNet Technologies.
• Delivered integration of nGenius Real Time Monitor 1.3 with Hewlett Packard's OpenView.
• Cisco shipped nGenius Real Time Monitor 1.3 as part of their CiscoWorks2000.
• Broadened product line with additional probes for growing gigabit and high-speed markets.

• A new product release called nGenius Performance Manager(TM) 1.4, implementing advanced architecture providing for converged network management data from many data sources such as probes, routers, switches and agents that will integrate that data into real time, historical, and projected trend information. This product is currently in beta test with enterprise and service providers and will begin shipment in the first quarter of fiscal 2003.
• New probes incorporating reduced size, higher function and speeds such as OC-12 for ATM and gigabit LAN probes.

                            NetScout Systems, Inc.
                    Condensed Consolidated Balance Sheets
                                (In thousands)
                                 (Unaudited)

                                                      March 31,      March 31,
                                                        2002           2001

    Assets
    Current assets:
       Cash and cash equivalents                       $19,332        $56,372
       Marketable securities                            44,849          5,010
       Accounts receivable, net                         12,932         11,753
       Inventories                                       3,698          8,653
       Refundable income taxes                             -            2,412
       Deferred income taxes                             1,293          1,374
       Prepaids and other current assets                 2,876          3,126

          Total current assets                          84,980         88,700

    Fixed assets, net                                    8,628          6,937
    Goodwill and other intangible assets, net           30,199         41,549
    Deferred income taxes                                7,617          4,894
    Long-term marketable securities                      5,084            -
    Other assets                                           790            -

          Total assets                                $137,298       $142,080


    Liabilities and Stockholders' Equity
    Current liabilities:
       Accounts payable                                 $2,456         $4,220
       Accrued compensation                              5,775          5,013
       Accrued other                                     2,715          1,749
       Income tax payable                                  542            -
       Deferred revenue                                 13,103         10,053

        Total current liabilities                       24,591         21,035

    Stockholders' equity:
       Common stock                                         34             33
       Additional paid-in capital                      107,529        106,354
       Deferred compensation                            (1,063)        (3,409)
       Treasury stock                                  (25,755)       (25,306)
       Retained earnings                                31,962         43,373

        Total stockholders' equity                     112,707        121,045

           Total liabilities and
            stockholders' equity                      $137,298       $142,080


                            NetScout Systems, Inc.
               Condensed Consolidated Statements of Operations
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                       Three Months Ended  Twelve Months Ended
                                              March 31,          March 31,
                                            2002     2001      2002     2001
    Revenue:
       Product                            $15,016  $13,058   $51,583  $75,673
       Service                              6,000    5,109    21,102   18,506
       License and royalty                  1,887    3,323     9,599   13,772
          Total revenue                    22,903   21,490    82,284  107,951

    Cost of revenue:
         Product (including stock-based
          compensation of $0, $0, $1
          and $1, respectively)             5,043    4,734    18,465   25,737
         Service (including stock-based
          compensation of $2, $2, $8
          and $9, respectively)               960    1,036     3,628    3,453
           Total cost of revenue            6,003    5,770    22,093   29,190

    Gross margin                           16,900   15,720    60,191   78,761

    Operating expenses:
       Research and development
        (including stock-based
        compensation of $551, $533,
        $2,193 and $1,577, respectively)    5,361    4,388    19,841   15,424
       Sales and marketing (including
        stock-based compensation of $26,
        $57, $109 and $236, respectively)   9,079   10,211    36,017   39,985
       General and administrative
        (including stock-based
        compensation of $2, $2, $7 and
        $11, respectively)                  2,376    1,881     8,107    8,382
       Amortization of goodwill and other
        intangible assets                   2,582    2,609    10,483    7,892
       In-process research and
        development                           -        -         -        268
           Total operating expenses        19,398   19,089    74,448   71,951

    Income (loss) from operations          (2,498)  (3,369)  (14,257)   6,810
    Interest income and other expenses,
     net                                      360      851     1,919    3,923
    Income (loss) before provision for
     (benefit from) income taxes           (2,138)  (2,518)  (12,338)  10,733
    Provision for (benefit from) income
     taxes                                   (397)     (11)     (927)   7,027
    Net income (loss)                     $(1,741) $(2,507) $(11,411)  $3,706

    Basic net income (loss) per share      $(0.06)  $(0.09)   $(0.39)   $0.13
    Diluted net income (loss) per share    $(0.06)  $(0.09)   $(0.39)   $0.12
    Shares used in computing:
         Basic net income (loss) per
          share                            29,606   29,282    29,533   28,487
         Diluted net income (loss) per
          share                            29,606   29,282    29,533   29,726

    Supplemental information:
    Net income (loss)                     $(1,741) $(2,507) $(11,411)  $3,706
    Tax adjustment (1)                        -        (23)      -        -
    Stock-based compensation (as detailed
     in expense categories above)             581      594     2,318    1,834
    Amortization of goodwill and other
     intangible assets                      2,582    2,609    10,483    7,892
    In-process research and development       -        -         -        268
    Pro forma net income excluding
     acquisition and stock-based
     compensation costs                    $1,422     $673    $1,390  $13,700

    Pro forma diluted net income per
     share, excluding acquisition and       $0.05    $0.02     $0.05    $0.46
     stock-based compensation costs

    Shares used in computing pro forma
     diluted net income per share
     excluding acquisition and stock-based
     compensation costs                    30,341   29,961    30,051   29,726

    (1) Tax adjustment for the three months ended March 31, 2001, which was in
    the year of the NextPoint acquisition, assumes an effective tax rate
    of 35% which represents the effective tax rate before factoring in timing
    issues due to non-deductible costs related to the acquisition of NextPoint
    and stock-based compensation.