CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES AND INVESTMENTS

3 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES AND INVESTMENTS

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents mainly consisted of U.S. government and municipal obligations, commercial paper, money market instruments and cash maintained with various financial institutions at June 30, 2024 and March 31, 2024.

Marketable Securities

The following is a summary of marketable securities held by NetScout at June 30, 2024, classified as short-term and long-term (in thousands):


	Amortized Cost		Unrealized Losses		Fair Value
Type of security:
U.S. government and municipal obligations	$	8,879	$	(16)	$	8,863
Commercial paper	12,086		—		12,086

Certificates of deposit	2,829		—		2,829

Total short-term marketable securities	23,794		(16)		23,778
U.S. government and municipal obligations	1,014		(11)		1,003

Total long-term marketable securities	1,014		(11)		1,003
Total marketable securities	$	24,808	$	(27)	$	24,781

The following is a summary of marketable securities held by NetScout at March 31, 2024, classified as short-term and long-term (in thousands):


	Amortized Cost		Unrealized Losses		Fair Value
Type of security:
U.S. government and municipal obligations	$	10,523	$	(26)	$	10,497
Commercial paper	8,648		—		8,648

Certificates of deposit	2,807		—		2,807
Total short-term marketable securities	21,978		(26)		21,952
U.S. government and municipal obligations	1,004		(10)		994

Total long-term marketable securities	1,004		(10)		994
Total marketable securities	$	22,982	$	(36)	$	22,946

Contractual maturities of the Company's marketable securities held at June 30, 2024 and March 31, 2024 were as follows (in thousands):


	June 30, 2024		March 31, 2024
Available-for-sale securities:
Due in 1 year or less	$	23,778	$	21,952
Due after 1 year through 5 years	1,003		994
	$	24,781	$	22,946

Investments

In February 2023, the Company entered into a forward share purchase agreement with Napatech A/S (Napatech), a publicly traded Danish company registered on the Oslo stock exchange, to purchase approximately 6.2 million shares of Napatech's common stock for $7.5 million. In April 2023, the Company settled the forward share purchase contract with Napatech in exchange for approximately 6.2 million shares of Napatech's common stock and recorded a $0.2 million change in the fair value of the derivative instrument in other income (expense), net within the Company's consolidated statement of operations during the three months ended June 30, 2023. As part of the agreement, the Company received the right to designate a representative to be nominated for election to the Napatech Board of Directors, which was approved by Napatech's Nomination Committee in April 2023. The Company accounts for this investment under the equity method and has elected to apply the fair value option to the investment. The Company records the investment at fair value at the end of each period based on the closing price of Napatech's stock and any change in fair value during the period is recorded in other income (expense), net within the Company's consolidated statement of operations. At June 30, 2024 and March 31, 2024, the fair value of the investment in Napatech was $20.2 million and $11.5 million, respectively, and was included in marketable securities and investments in the Company's consolidated balance sheet. During the three months ended June 30, 2024 and 2023, the Company recognized an $8.8 million increase and a $0.4 million decrease, respectively, in the fair value of the equity investment in Napatech in other income (expense), net within the Company's consolidated statement of operations. For the three months ended June 30, 2024 and 2023, the unrealized losses related to foreign currency translation on the equity investment in Napatech were immaterial.