Netscout Systems reported revenue of $235.0 million for its fourth quarter and full fiscal year 2019 ended March 31, 2019, compared with $235.2 million in the same quarter one year ago. Non-GAAP total revenue for the fourth quarter of fiscal year 2019 was $235.2 million versus $238.5 million in the same quarter one year ago. Fourth-quarter non-GAAP revenue in fiscal year 2018 included $10.7 million attributable to the handheld network test (HNT) tools business that was divested in mid-September 2018.
Product revenue (GAAP and non-GAAP) for the fourth quarter of fiscal year 2019 was $125.5 million, which was approximately 53% of total revenue.
Service revenue (GAAP) for the fourth quarter of fiscal year 2019 was $109.5 million, or approximately 47% of total revenue versus service revenue (GAAP) of $113.0 million, or approximately 48% of total revenue, for the same period one year ago.
“Our fourth-quarter fiscal year 2019 performance was fundamentally consistent with the preliminary results that we announced last month,” stated Anil Singhal, NETSCOUT’s president and CEO. “Our fourth-quarter revenue was lower than planned primarily due to delayed revenue recognition on a large service assurance project at an international mobile operator. Nevertheless, we produced a good quarter in our enterprise customer segment with solid organic expansion due to strong growth in our DDoS product area and relatively stable results in the service assurance product area. Our operating profitability was driven by strong gross margins due in part to higher software sales and lower operating expenses, with EPS exceeding our preliminary estimate due to a lower-than-anticipated tax rate.”
NETSCOUT trims quarterly outlook citing delayed project
The company now expects 4Q FY2019 revenue to be approximately $15 million lower than originally anticipated, primarily due to delayed revenue recognition on a large service assurance project at an international mobile operator. However, NETSCOUT anticipates a solid quarterly GAAP and non-GAAP EPS performance due to healthy gross margins resulting from a more favorable product mix and lower operating costs.
Anil Singhal, NETSCOUT’s president and CEO, stated, “Our fourth-quarter fiscal year 2019 revenue shortfall was primarily caused by a longer-than-expected implementation schedule for the largest phase of a $15 million project at an international mobile operator, which delayed revenue recognition. Nevertheless, we expect that the revenue associated with this phase of our customer’s project will be recognized within the next several quarters. Despite this delay, we produced another quarter of solid top-line results in our enterprise customer segment and experienced a relatively strong performance in our security product area. Healthy gross margins aided by good adoption of our software-centric offerings and cost controls throughout the year played important roles in our ability to successfully achieve our prior EPS guidance.”
