NETSCOUT SYSTEMS INC Fair Value Disclosure
NOTE 5 – FAIR VALUE MEASUREMENTS
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant unobservable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at March 31, 2026 and 2025 (in thousands):
|
Fair Value Measurements at |
|
|||||||||||||
|
March 31, 2026 |
|
|||||||||||||
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
$ |
531,929 |
|
|
$ |
54,570 |
|
|
$ |
— |
|
|
$ |
586,499 |
|
U.S. government and municipal obligations |
|
16,082 |
|
|
|
— |
|
|
|
— |
|
|
|
16,082 |
|
Commercial paper |
|
— |
|
|
|
48,793 |
|
|
|
— |
|
|
|
48,793 |
|
Corporate bonds |
|
6,159 |
|
|
|
— |
|
|
|
— |
|
|
|
6,159 |
|
Certificates of deposit |
|
— |
|
|
|
6,048 |
|
|
|
— |
|
|
|
6,048 |
|
Agency Bonds |
|
41,564 |
|
|
|
— |
|
|
|
— |
|
|
|
41,564 |
|
Derivative financial instruments |
|
— |
|
|
|
22 |
|
|
|
— |
|
|
|
22 |
|
|
$ |
595,734 |
|
|
$ |
109,433 |
|
|
$ |
— |
|
|
$ |
705,167 |
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments |
$ |
— |
|
|
$ |
(258 |
) |
|
$ |
— |
|
|
$ |
(258 |
) |
|
$ |
— |
|
|
$ |
(258 |
) |
|
$ |
— |
|
|
$ |
(258 |
) |
|
Fair Value Measurements at |
|
|||||||||||||
|
March 31, 2025 |
|
|||||||||||||
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
$ |
434,121 |
|
|
$ |
23,294 |
|
|
$ |
— |
|
|
$ |
457,415 |
|
U.S. government and municipal obligations |
|
3,008 |
|
|
|
2,410 |
|
|
|
— |
|
|
|
5,418 |
|
Commercial paper |
|
— |
|
|
|
17,358 |
|
|
|
— |
|
|
|
17,358 |
|
Certificates of deposit |
|
— |
|
|
|
505 |
|
|
|
— |
|
|
|
505 |
|
Equity investment in Napatech |
|
11,781 |
|
|
|
— |
|
|
|
— |
|
|
|
11,781 |
|
Derivative financial instruments |
|
— |
|
|
|
197 |
|
|
|
— |
|
|
|
197 |
|
|
$ |
448,910 |
|
|
$ |
43,764 |
|
|
$ |
— |
|
|
$ |
492,674 |
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments |
$ |
— |
|
|
$ |
(55 |
) |
|
$ |
— |
|
|
$ |
(55 |
) |
|
$ |
— |
|
|
$ |
(55 |
) |
|
$ |
— |
|
|
$ |
(55 |
) |
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments.
The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency.
The Company's Level 2 investments are classified as such because they are valued using observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets in markets that are not active.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 14, 2026 | Showing above |
| 2025 | May 15, 2025 | |
| 2024 | May 16, 2024 | |
| 2023 | May 16, 2023 | |
| 2022 | May 19, 2022 | |
| 2021 | May 20, 2021 | |
| 2020 | May 20, 2020 | |
| 2019 | May 28, 2019 | |
| 2018 | May 22, 2018 | |
| 2017 | May 24, 2017 | |
| 2016 | May 31, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.