NetScout sees Q2 EPS 60c-62c, consensus 54c

Sees Q2 revenue $195M-$197M, consensus $223.6M. Anil Singhal, CEO, stated: “Today, we are announcing preliminary second fiscal quarter results and updating our full fiscal year 2024 outlook to reflect a recent slowing in order conversion. We believe this is related to industry and economic headwinds facing our customers that began to affect our revenue in the last month of the second fiscal quarter and is expected to impact the second half of fiscal year 2024. In consideration of these recent impacts to revenue, we have begun to take several actions to manage discretionary costs and align spending with the current environment. These actions should allow us to reduce the negative impact to our full fiscal year non-GAAP earnings per share outlook without compromising our longer-term objectives. Entering fiscal Q2, we were optimistic that our recently released solutions and our solid pipeline of opportunities would support growth through the balance of the year. However, we recently began to experience a slowing in demand flow-through as customers implemented higher spending scrutiny and delayed project funding. We attribute this primarily to two factors: (1) the widely publicized capital spending pressures facing the service provider industry, which NETSCOUT had been relatively insulated from until recently; and (2) the challenging macroeconomic environment facing our customers that has created sub-pockets of softness across multiple enterprise sectors. We will provide additional insight during our second fiscal quarter financial results call in early November. Longer term, we remain confident in our ability to deliver sustainable value to our stakeholders and believe we remain well-positioned with legacy and next-generation solutions across the portfolio that will continue to play a critical role in enabling customers to tackle the performance, availability, and security challenges of the increasingly complex connected digital world.”