Ladies and gentlemen, thank you for standing by and welcome to NetScout's Second Quarter Fiscal Year 2025 Financial Results Conference Call. At this time, all parties are in a listen-only mode until the question-and-answer portion of the call. As a reminder, this call is being recorded. Tony Piazza, NetScout's Deputy CFO and his colleagues at NetScout are on the line with us today. [Operator Instructions] I would now like to turn the call over to Tony Piazza to begin the company's prepared remarks.

Thank you, operator and good morning, everyone. Welcome to NetScout's second quarter fiscal year 2025 conference call for the period ended September 30, 2024. Joining me today are Anil Singhal, NetScout's President and Chief Executive Officer; Michael Szabados, NetScout's Chief Operating Officer; and Jean Bua, NetScout's Executive Vice President and Chief Financial Officer. There is a slide presentation that accompanies our prepared remarks. You can advance the slides in the webcast viewer to follow our commentary. Both the slides and the prepared remarks can be accessed in multiple areas within the Investor Relations section of our website at www.netscout.com, including the IR landing page under Financial Results, the webcast itself and under Financial Information on the Quarterly Results page. Moving on to Slide number 3. Today's conference call will include forward-looking statements. Examples of forward-looking statements include statements regarding our future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations and other statements that are not historical fact. Actual results could differ materially from any forward-looking statements. These statements speak only as of today's date and involve risks and uncertainties, including but not limited to, those described on this slide and in today's financial results press release which are available on the Investor Relations section of our website as well as in the company's most recent annual report on Form 10-K and subsequent SEC filings on file with the Securities and Exchange Commission. NetScout assumes no obligation to update any forward-looking information, except as required by law. Now, let's move -- let's turn to Slide number 4 which involves non-GAAP metrics. While this slide presentation includes both GAAP and non-GAAP results, unless otherwise stated, financial information discussed on today's conference call will be based on a non-GAAP basis only. The rationale for providing non-GAAP measures, along with the limitations of relying solely on those measures is detailed on this slide and in today's press release. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations of all non-GAAP metrics with the applicable GAAP measures are provided in the appendix of the slide presentation in today's earnings press release and on our website. I will now turn the call over to Anil for his prepared remarks. Anil?

Thank you, Tony and good morning, everyone. Welcome and thank you all for joining us today. We delivered Q2 fiscal year 2025 revenue and earnings results in line with our expectations as we continue to position NetScout to win in the market. We remain confident that our differentiated solutions are well positioned to address our customers' cybersecurity and service assurance needs well into the future. During the quarter, we released several products and -- product enhancements aligned with key technology trends that help address our customers' cybersecurity and service assurance needs, including our AI-ready smart data solutions. We also had a strong turnout and interest in our recent annual Engage Technology and User Summit that we attribute to our customer enthusiasm for our current and upcoming portfolio of solutions. Looking ahead, we remain focused on executing against our full fiscal year 2025 non-GAAP expectations as we capitalize on the opportunity and navigate the challenges of the current market environment. Let's turn to Slide number 6 for a brief recap of our non-GAAP financial results for the second quarter and first half of our fiscal year 2025. For the second quarter, revenue was approximately $191 million, down approximately 3% compared to the prior year period. The comparison was impacted by 2 items that benefited the prior year period, approximately $11 million of backlog-related revenue and approximately $3 million for the now divested test optimization business. Normalizing for those, Q2 revenue would have grown at a mid-single-digit percentage. Diluted earnings per share was $0.47 for the second quarter which is down approximately $0.23 or $0.14 from the prior year. As we previously noted, this includes an approximately $0.15 headwind from the reversal of incentive-based related expenses that benefited last year's Q2. Normalizing for this, Q2 earnings would have been slightly higher year-over-year,…

Thank you, Anil and good morning, everyone. Slide 10 outlines the areas I will be covering today, starting with Q2 customer win highlights. This quarter, I will begin by focusing on a high single-digit 8-figure combination of orders from a leading global financial institution that spans both our service assurance and cybersecurity product lines. This has been a long-standing customer of ours, who uses our service assurance solutions to manage the performance of their networks and customer-facing applications in order to ensure the quality of their customers' experience. They leverage our cybersecurity solutions to protect the availability of their infrastructure against DDoS attacks to prevent disruption to their digital services. In both product lines, they upgraded and expanded our solutions to ensure they have the most current technological capabilities such as adaptive DDoS and security to assure and secure their network. We were awarded this additional business due to our proven technology, outstanding customer support and trusted long-standing relationship. Turning to our go-to-market activities now. As Anil stated, we recently released our first half 2024 DDoS Threat Intelligence Report. The report provided significant insight into the evolving cybersecurity landscape, leveraging our visibility into nearly half of all internal traffic. Additionally, since our last earnings call, we have announced several product advancements. This includes the release of our Omnis AI Insights solution to deliver high-quality, actionable AI-ready streaming smart data based on Deep-Packet Inspection technology to feed our customers' AI initiatives and enable critical insights and outcomes. We also announced an update of our advanced scalable Deep-Packet Inspection based Omnis Cyber Intelligence network detection and response for NDR platform which now has additional behaviour analytics to enable earlier detection of advanced threats. Finally, we recently hosted our annual Engage Technology and User Summit in Arlington, Texas. It was another successful event with strong attendance and interest in our new technology initiatives. At the show, we highlighted our upgraded legacy and new solutions and showcased how our highly curated data set can solve security, observability and service assurance problems faster when integrated with AIOps platforms from our industry-leading partner network, including Splunk and ServiceNow, who co-presented these areas and engaged with our customer attendees. We also conducted our typical combination of presentations, panel discussions, solution demonstrations and hands-on training. Thank you, everyone. That concludes my remarks and I will now turn the call over to Jean.

Thank you, Michael and good morning, everyone. I will review key metrics for our second quarter and first half of fiscal year 2025 and provide some additional commentary on our fiscal year 2025 outlook. As a reminder, this review focuses on our non-GAAP results unless otherwise stated and all reconciliations with our GAAP results appear in the presentation appendix. Regardless, I will note the nature of any such comparisons. Additionally, all comparisons are on a year-over-year basis, unless otherwise noted. Slide number 12 details the results for the second quarter and first half of fiscal year 2025. Focusing on our quarterly performance, total revenue for the second quarter of fiscal year 2025 was $191.1 million, down 2.9%. As Anil shared, our Q2 fiscal year 2025 revenue would have grown at a mid-single digit percentage when normalizing for the $11 million in backlog usage and $3 million from the disposition of our test optimization business that took place last year. Product revenue of $81 million was up 0.6% year-over-year. Service revenue was $110.1 million, a decrease of 5.3% which was primarily due to the timing of the renewal of a large customer's maintenance contract that is expected to close in Q3. Gross profit margin was 79.7% in the second quarter, down 0.6 percentage points. Quarterly operating expenses increased 5.2% in comparison to the prior fiscal year which benefited from the reversal of incentive-related expenses. Normalizing for this, operating expenses would have declined mid-single digits, primarily attributable to cost management initiatives, including the voluntary separation program. We reported an operating profit margin of 23.1% in Q2 fiscal year 2025 compared with 28% in the same quarter last year. Diluted earnings per share was $0.47 which included an unrealized loss on a foreign investment of approximately $0.02. This was down 23% from $0.61…

[Operator Instructions] And we will take our first question from Matthew Hedberg with RBC Capital Markets.

This is Mike Richards [ph] on for Matt. Maybe just broadly to start, are you guys seeing things stabilize in the environment? And then given that you expect an even split between Q3 and Q4 revenue which usually shows a seasonally strong Q3, do you think you could get some boost from a December budget flush this year that you're maybe not factoring in?

Yes. I mean, that's why we have a guidance range and to account for those kinds of upsides. And yes, usually, we benefit from the budget flush because we work with very big companies, large carriers. And that's why often the Q3 is actually better than Q4 in terms of bookings. So yes, we are looking to that and we are working on several opportunities.

Got it. And then maybe is there anything notable to call out in cybersecurity in terms of what's driving growth and then maybe how that's tracking against your internal expectations and getting to that double-digit growth that you guys are aiming towards?

Yes. So we have made a slight pivot about 6 months ago in terms of our positioning to cover some of the gaps in cybersecurity solutions in the market which is more around the analytics part which we have some of the best technology in the DPI area. So that's going very well. Traction is a little slow but we are looking over the next 6 to 12 months, I think we're going to see this attached to some of our customers and we have also come up with some interesting ideas on how we can position our OCI or Omnis Cyber Intelligence solution in the DDoS space which was not in the plan last year.

And we will take our next question from Kevin Liu with K. Liu & Company.

Nice quarter here. Maybe just to start off with, Verizon has started talking about moving towards stand-alone 5G in the near future. I'm wondering if you can talk through some of the puts and takes on how that either increases your opportunity as they do things like network slicing versus any risk you might see if they start to deprecate some of the more legacy 4G networks?

Well, there is continue to be, Kevin, a consolidation in the market, both in Europe and which does affect some of our business. But overall, I think the vendors are introducing slicing this year. We are announcing a new release. I don't see a big potential in the short term on private 5G or stand-alone but slicing is both a revenue opportunity for our customer as well as for us because slicing is an option -- optional module in our solution which doesn't require new hardware upgrade but it's a software solution. So yes, we are looking for initial 2 or 3 customers in the U.S. very interested in leveraging that functionality.

Got it. And then also just on the carrier front, there seems to be more talks on their part about just the convergence of mobile and fiber broadband. I'm wondering if you have solutions to address kind of the latter piece of that or if there's anything in kind of the pipeline that you could do in order to help carriers as we move down that strategy.

Yes. So there are two kinds of carriers, people who are monitoring user plane. And those people will obviously drive more business with us as fixed wireless initiatives take over in U.S. and elsewhere. And we are counting on that for next year. For people who are not monitoring user plane, they are largely not impacted from a revenue point of view for us. But our top 5 or 6 big customers are all very interested and we think that there will be uptick in the dramatic uptick in the fixed wireless traffic. And also the ARPUs for those are much better than the mobility. So because of that, I think there will be potential investment on NetScout.

Great. And if I could just ask one last one. Any update on your AIOps strategy as it relates to how much contribution you expect from some of the leading partners that you talked about versus what you guys might be focused on directly?

Yes, this is very early. We have seen a lot of interest, a lot of discussions are going on with the customer and partners but we don't expect much impact from that this year, this fiscal year from AIOps.

And it appears that there are no further questions at this time. I will now turn the program back to Tony Piazza.

Thank you, operator. That concludes our financial results call for today. Thank you for joining us and enjoy the rest of the day.

Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.