NETSCOUT trims quarterly outlook citing delayed project

NETSCOUT SYSTEMS announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2019 below previous guidance.

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.”

Singhal concluded, “As we move forward, we believe that the most severe headwinds impacting our revenue performance in recent years have largely subsided, and we remain focused on executing key elements of our strategy that we believe are integral to driving improved, sustainable financial performance. Our plans for fiscal year 2020 anticipate both organic top-line growth and EPS growth. We will share more insight when we report our full-year fiscal year 2019 results next month.