were $126 million, up 4.6% year-over-year, primarily reflecting overhead costs associated with the recent DDoS acquisition, higher sales commissions on increased revenue, and the timing of variable incentive compensation expense. The operating margin improved 660 basis points to 20.8%, reflecting revenue growth, favorable product mix, and disciplined expense management. We delivered net income of $38.6 million, or diluted earnings per share of 52 cents, an increase over the year-ago quarter net income of $24.7 million, or 34 cents per diluted share. Let's turn to slide 11, where I will walk you through the key revenue trends by product lines and customer verticals. For the first quarter of fiscal year 2027, service assurance revenue increased by 19.7%, and cybersecurity revenue grew by 0.6%. During the same period, service assurance accounted for 67% of total revenue, and cybersecurity accounted for the remaining 33%. As noted earlier, service assurance benefited in part from government-related orders, including some received earlier than expected. while cybersecurity faced a more difficult comparison as the same quarter in the prior year grew approximately 18%. Turning to our customer verticals, for the first quarter, enterprise revenue grew by 19.1% and service provider revenue grew by 3.3%. During the same period, enterprise accounted for 63% of our total revenue and service provider accounted for the remaining 37%. Additionally, No customer accounted for more than 10% of our revenue for the first quarter of fiscal year 2027. Turning to slide 12, for the first quarter of fiscal year 2027, the U.S. represented 59% of revenue and international represented 41% of revenue. Slide 13 shows key balance sheet items and free cash flow for the period. We ended the first quarter of fiscal year 2027 with $668.5 million in cash, cash equivalents, and short and long-term marketable securities, compared with $705.1 million at the end of fiscal year 2026. Free cash flow was $44.3 million for the first quarter. The reduction in cash primarily reflects the May 1st acquisition of the DDoS assets of DigiCert, Inc., which we previously disclosed and discussed as a subsequent event on our Q4 FY26 earnings call. We did not repurchase shares during the first quarter and remain committed to our share repurchase program. Let's move to slide 14 for our fiscal year 2027 outlook and some additional color on the second quarter. As Anil noted earlier, we are reaffirming our fiscal year 2027 outlook provided last quarter. We continue to expect year-over-year growth in both revenue and earnings with the following assumptions for the full fiscal year. Revenue in the range of $885 to $915 million. Non-GAAP EPS in the range of $2.65 to $2.80. A non-GAAP effective tax rate of approximately 20% and weighted average diluted shares outstanding of approximately $74 to $75 million. For the second quarter, we expect revenue to be broadly consistent with the prior year period, reflecting the previously mentioned acceleration of orders into Q1 and the strong comparison with the prior year's second quarter when revenue grew nearly 15% and benefited from orders accelerated from the third quarter. As a result, we expect first-half revenue growth in the mid-single digits. We expect Q2 EPS to grow in the high single digits. Driven in part by our engaged conference shifting from Q2 in the prior year to Q3 this fiscal year. In summary, we delivered a strong first quarter and solid start to our fiscal year. We remained focused on executing against our fiscal year 2027 objectives. Our capital allocation priorities remained consistent, investing in profitable growth, maintaining a strong financial position. and returning excess cash to shareholders over time, primarily through share repurchases. Longer term, we believe NETSCOUT is well positioned to support customers as their network, security and operations environments become more complex. Our experience in cybersecurity, service assurance and network observability, together with our AI-ready smart data platform, gives customers a trusted foundation for digital transformation and AI-enabled operations. That concludes my review of our financial results and outlook. Please note that we plan to attend the B. Reilly Consumer and TMT Conference in New York in September. We look forward to seeing some of you there. With that, let's open it up for questions. Operator?

Thank you. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, press star 2. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Our first question will come from Matt Hedberg with RBC Capital Markets. Please go ahead.

Hey, guys. This is Simran for Matt Hedberg. Congrats on the quarter. My first question is that you noted that Q1 benefited from like the government-related orders that were received earlier than expected. Could you quantify or just give more color on how much got pulled in and how we should think about that impacting linearity for Q2 in terms of those orders?

Sure. So the orders that were pulled in were about $10 to $15 million, primarily government-related. If I were to normalize the quarter, it would have grown in the mid-single digits, which would be consistent with where we see the first half of the fiscal year and consistent with our full year outlook.

Okay, cool. And then just on some of the traction around your innovations like Sensor and Streamr, how should we think about that contribution for the year and then just more generally what's resonating well with customers?

Well, so the first thing is that our service assurance wrote that Inc. could really include that omnis revenues. That's how we are categorizing it right now. And so we have less than 10 customers of that solution already. And people are really hungry. And not just people, but AI algorithms can do a great job. But then you also need a great data set. So we see a Strong Demand for what we are doing and especially since this can be plugged in as a software module to our existing service assurance solution, one of the challenges we need to watch out for is what is the sales cycle looks like because these are big AI projects and those are the two dynamics we are managing right now.

So I believe we see a lot of excitement at the customer level. We see a solid pipeline for this area. But, I mean, customers are still experimenting. And so as they do that and decide on what their AI strategy is, then you'll probably start to see more. I think last quarter we said for the full year it was about $15 million for FY26. If I were to annualize the first quarter, it's growing nicely for the year, so we expect good contribution. But again, it's still small, so we'll update people as the year goes on.

Thank you. Our next question will come from Eric Spiger with B. Riley Securities. Please go ahead.

Yeah, congrats on a good quarter. Could you first comment? It sounds like federal accelerated. So can you comment a little bit about what you're expecting for federal as we enter the fiscal year end for Q2? And then your rest of world was down. Does that reflect slowing in the Middle East with the conflict going on there? Or how should we think of the rest of world business since that's been a growth driver in the past?

So from a federal government perspective, it tends to run in the mid to high single digits as a percentage of total revenue. For Q1, it ran in the mid teens. We have a nice solid pipeline of federal deals. But as you know, with the federal government, it's all about magnitude and timing of funding. But we're optimistic about the federal government right now.

Just to be clear on that, I thought you said that you did not have any 10% customers vote federal in aggregate? And federal, is that to suggest that federal and aggregate was in the mid, did you say the mid single digits or did you say mid teens? Mid teens.

Yeah, so, you know, the federal revenue is made up of multiple customer and so no one customer, the whole thing. With regard to rest of world, from our perspective, it's really just timing of deals. We don't see any trends in that right now.

Very good. Thank you.

Thank you. Our next question will come from Kevin Lu with K. Lu and Company. Please go ahead.

Hi. Good morning, guys. Just on the cybersecurity side of things, I'm curious if you heard anything from customers about the impact of the mythos model introduction and how fears over AI exploits and the like could affect things. I'm just wondering if that's either held up or maybe accelerated some deals and generally how you think that impacts deal cycles as we move forward.

I think there are two areas, Kevin. So first in the DDoS area, we had announced an option to our product called ADP. and which is basically AI enabled automation support and things like that for our DDoS solution. So that is going well and it's still already in the adoption cycle. On the cybersecurity on the Omni side, we have not focused on that right now because we see a lot of demand on the service assurance side with AI but at some point, will be able to use our omni-sensor and streamer solution for security use cases also. But right now, the focus is on AI and ADP on the DDoS side and on the service assurance side with AI.

Understood. And then maybe one for Tony. Just on the inventory increase in the quarter, it's kind of up to the highest levels we've seen in a few years. I'm just wondering if there's any particular driver of that and what sort of implications that might have for your product growth margin in terms of makeshift as we make our way through the year?

Yeah. So, as you know, there's some supply chain challenges out there resulting from these AI data that are built out. So, some of the equipment is more challenging to get and the prices are increasing. We are working with our vendors that participate in our COTS program, so customers can buy the software from us and the hardware from the vendors, to try to secure inventory and control the prices on that side. But additionally, NETSCOUT has purchased incremental inventory, which you saw because the inventory went up about $7 million in the quarter. to secure that inventory so that we can help mitigate any challenges that customers might have as they think about purchasing the equipment. Because although from an equipment perspective it's not that significant for NETSCOUT because NETSCOUT is primarily a software vendor, customers may change their buying behaviors Thank you.

There are no further questions in the queue so I'd like to close out today's call. Thank you for joining, ladies and gentlemen, and we appreciate your participation. You may now disconnect.