Shares in NetScout Systems Inc. rose more than 6% in regular trading today after the cybersecurity company smashed analyst forecasts for revenue and earnings in its fiscal third quarter.

For the quarter that ended Dec. 31, NetScout reported adjusted net income of 73 cents per share, down from $1 per share in the same quarter of last year, on revenue of $218.1 million, down 19.1% year-over-year. Analysts were expecting much more humble figures of 37 cents and $198.38 million.

Product revenue in the quarter came in at $95.1 million, down from $149.5 million in the same quarter of fiscal year 2023, and it accounted for 44% of NetScout’s revenue vs 55% the year prior. Service revenue came in at $122.2 million, 56% of total revenue and up from $120.1 million the year before.

On an unadjusted basis, NetScout saw a loss from operations of $134.4 million in the quarter, which included a noncash goodwill impairment charge of $167.1 million. In comparison, the company reported non-adjusted income from operations of $63.8 million in the third quarter of last year.

As of the end of December, NetScout had $330.1 million in cash, cash equivalents and marketable securities on hand, down from $427.9 million a year prior. Notably, during the quarter, the company spent $18.8 million repurchasing slightly more than 700,000 shares of its common stock at an average price of $26.66 per share.

“We delivered third fiscal quarter revenue ahead of expectations as we benefitted from the timing of calendar year-end customer budget spending,” Anil Singhal, president and chief executive of NetScout, said in the company’s earnings release. “While the market environment remains challenging with constrained customer spending and elongated sales cycles, primarily impacting our service assurance business, our cybersecurity business once again grew year-over-year as enterprise and service provider customers continue to prioritize spending in this area.”

For its fiscal fourth quarter, NetScout said it expects adjusted net income per share of $2.15 to $2.20 on revenue of about $840 million. Analysts were expecting $2.10 and $843.6 million, the latter figure providing the only miss NetScout had across otherwise solid figures.

“Looking ahead, we expect to deliver full fiscal year 2024 revenue at the low end of our previously disclosed target range as we continue to navigate the current market environment,” Singhal added. “Strategically, we remain focused on leveraging our industry-leading ‘Visibility Without Borders’ platform to help customers tackle the performance, availability and security challenges of the increasingly complex connected digital world while delivering shareholder value.”

Image: NetScout