{"url_path":"/sec/ntct/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A Quantitative and Qualitative Disclosures About Market Risk","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1078075/0001078075-26-000050-index.html","accession_number":"0001078075-26-000050","cik":"0001078075","ticker":"NTCT","issuer_name":"NETSCOUT SYSTEMS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1078075/0001078075-26-000050-index.html","primary_entity_key":"0001078075","primary_entity_name":"NETSCOUT SYSTEMS INC"},"word_count":513,"has_tables":true,"body_markdown":"Item 7A. Quantitative and Qualitative Disclosures About Market Risk\n\nInterest Rate Risk. We hold our cash, cash equivalents and investments for working capital purposes. Some of the securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain our portfolio of cash, cash equivalents and investments in a variety of securities, including money market funds and corporate and government debt securities. The risk associated with fluctuating interest rates is limited to our investment portfolio. Due to the short-term nature of these instruments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates, however, would reduce future interest income. The effect of a hypothetical 10% increase or decrease in overall interest rates would not have had a material impact on our operating results or the total fair value of the portfolio.\n\nCredit Risk. Our cash equivalents and marketable securities consist primarily of U.S government and municipal obligations, agency bonds, corporate bonds, commercial paper, certificates of deposit, and money market instruments.\n\nAt March 31, 2026 and periodically throughout the year, we have maintained cash balances in various operating accounts in excess of federally insured limits. We limit the amount of credit exposure with any one financial institution by evaluating the creditworthiness of the financial institutions with which we invest.\n\nForeign Currency Exchange Risk. As a result of our foreign operations, we face exposure to movements in foreign currency exchange rates, primarily the Euro, British Pound, Indian Rupee, and Canadian Dollar. The current exposures arise primarily from expenses denominated in foreign currencies. We currently engage in foreign currency hedging activities in order to limit these exposures. We do not use derivative financial instruments for speculative trading purposes.\n\nAt March 31, 2026, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $11.0 million. The valuation of outstanding foreign currency forward contracts at March 31, 2026 resulted in a liability balance of $0.3 million, reflecting unfavorable contract rates in comparison to current market rates at this date and an asset balance of less than $0.1 million, reflecting favorable rates in comparison to current market rates. At March 31, 2025, we had foreign currency forward contracts designated as hedging instruments with notional amounts totaling $10.6 million. The valuation of outstanding foreign currency forward contracts at March 31, 2025 resulted in a liability balance of $0.1 million, reflecting unfavorable contract rates in comparison to current market rates at this date and an asset balance of $0.2 million, reflecting favorable rates in comparison to current market rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical consolidated financial statements. As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates.\n\n52\n\n[Table of Contents](#toc_page)"}