To My Fellow Shareholders:

As we enter fiscal year 2026, I want to take a moment to reflect on our fiscal year 2025 performance, reaffirm our strategic direction and progress, and express my gratitude for your continued trust and support.

Fiscal Year 2025 Financial Performance

Fiscal year 2025 was a year of steady execution and meaningful advancement for NETSCOUT. We delivered on our financial commitments, advanced our innovation agenda, and continued to support our customers as they navigate an increasingly complex digital and threat environment.

We closed fiscal year 2025 with revenue of approximately $823 million, which was relatively consistent with the prior year when adjusted for the divestiture of the Test Optimization business. These results were in line with our expectations at the start of the fiscal year, as we anticipated continued momentum in our Cybersecurity offerings, which delivered nearly 7% year-over-year revenue growth, alongside persistent headwinds in the domestic service provider area of our Service Assurance offerings, where carriers remain focused on balancing 5G investment and monetization challenges. These results are particularly meaningful when adjusting for the Test Optimization business divestiture and the prior year's backlog-driven revenue gains, as they indicate the business would have achieved mid-single-digit growth under more normalized conditions.

We achieved non-GAAP earnings per share of $2.22, representing a modest increase over the prior year. We also improved our gross and operating margins through disciplined cost management and enhanced operational efficiency. Finally, we generated more than $200 million in free cash flow, fully repaid our outstanding debt of $100 million, repurchased 1.4 million shares of our common stock for approximately $25 million, and ended the year with nearly $500 million in cash, cash equivalents, and investments, further strengthening our financial position. We continue to maintain strong liquidity, supported by our cash and cash equivalents and full access to our $600 million revolving credit facility. This financial flexibility enables us to continue to invest in innovation and return value to shareholders.

Advancing Our Strategic Priorities

During the year, we continued to invest in innovation and product development to meet the evolving needs of our customers. Our Cybersecurity portfolio expanded with newer offerings such as Adaptive DDoS, Mobile Security, and Distributed Threat Mitigation, which are designed to address the growing sophistication of cyber threats. We further integrated artificial intelligence and machine learning technology into our Arbor Edge Defense (AED), Arbor Enterprise Manager (AEM), and Arbor Cloud solution sets to combat AI-enabled DDoS threats. Our threat detection capabilities were extended to include advanced threat analytics for forensics and investigations. These solutions are gaining traction with both enterprise and service provider customers, as evidenced by recent wins with major telecom service providers, a leading cloud service provider, and top financial institutions.

Our Service Assurance business continues to evolve in response to the shift from on-premise infrastructures to cloud and now cloud-native environments, as well as the growing demands of AI-driven initiatives. Our flagship nGenius InfiniStream solution, already extended to support cloud deployments, now enables deep visibility across hybrid and multi-cloud environments. We continue to actively support our enterprise customers with our new Edge Sensor solution to extend visibility and improve user experiences at the edge of their networks. For our service provider customers, our Smart Data and Deep Packet Inspection capabilities remain critical to helping them ensure performance, user experience, and security across increasingly distributed and dynamic networks as they evolve their 5G, Fixed Wireless Access, and AIOps initiatives.

We also continued to develop our partnership ecosystem. NETSCOUT has established strategic alliances to collaborate with best-in-class technology innovators and provide integrated solutions that improve the quality, reliability, and success of digital technologies and transformations for our mutual customers. The datasets generated by our Deep Packet Inspection technology can be easily ingested into data lakes or streamed through pipelines enabling a "better together" synergy with some of our key partners. In addition, we engaged directly with the market through key industry events and our own customer and user events, including our ENGAGE and Connect conferences in key locations throughout the world. These forums provide valuable opportunities to showcase our technology and deepen relationships with our global customers and partners.

Leadership Transition and Looking Ahead

As we enter the new fiscal year, we mark a leadership transition with the retirement of Michael Szabados, our Chief Operating Officer, and Jean Bua, our Chief Financial Officer, in May. I want to sincerely thank them for their many contributions, the steady leadership they provided to NETSCOUT throughout their tenure, and their continued support as advisors over the next year. We are fortunate to have strong successors in Sanjay Munshi and Anthony Piazza, who, as part of a planned succession, have assumed the roles of COO and CFO, respectively. I expect this to be a smooth transition highlighting the deep bench strength of NETSCOUT at the senior leadership level. I look forward to working with them as we continue to execute our strategy.

Looking ahead, we are focused on driving revenue growth, enhancing profitability, and continuing to invest in innovation. We expect to benefit from sustained momentum in our Cybersecurity offerings and remain committed to maintaining strong financial discipline. Over the longer term, we are dedicated to delivering mission-critical solutions that ensure the performance, availability, and security of digital infrastructure for organizations around the world. Our role as "Guardians of the Connected World," is as pressing and relevant as ever as we are uniquely positioned to help our customers succeed amid accelerating digital transformation, expanding cybersecurity threats, and the evolution of next-generation networks.

In closing, I want to thank our employees for their dedication, our customers and partners for their trust, and you—our shareholders—for your continued support. I remain confident in our strategy, inspired by our mission, and excited about the opportunities ahead.

We look forward to sharing our progress with you in fiscal year 2026 and beyond.

Sincerely,

Anil Singhal
Co-Founder, President, Chief Executive Officer, and Chairman of the Board