TO OUR STOCKHOLDERS

As we prepare this year's annual report, we find ourselves in a much different world than a year ago due to the COVID-19 global pandemic. Given the environment as we completed our fiscal year, we are pleased with our performance and achievements for fiscal year 2020.
Meeting Fiscal Year 2020 Objectives
A year ago, I wrote that our priority in fiscal year 2020 was to produce top-line growth in order to drive non-GAAP operating leverage, diluted earnings per share (EPS) growth, and strong free cash flow. Entering the year, we were excited about the ongoing adoption of our software-centric portfolio and were enthusiastic about the potential of our newest product innovations. Furthermore, the most severe top-line headwinds we had been facing during the past few years had substantially dissipated.
I am pleased to report that we achieved the majority of our financial objectives, despite the fact that the COVID-19 global pandemic impacted the last quarter of our fiscal year, leading to flat annual revenue on an organic basis, which excludes the divested HNT tools business from the comparison. We drove a 35% year-over-year increase in sales of our software-centric solution as we advanced its adoption to approximately 30% of our service assurance product revenue. This growth, coupled with our strict cost management, enabled us to deliver on our goal of increased operating leverage. We also exceeded our diluted EPS and free cash flow goals as a result of our strong operating leverage and disciplined capital management approach. We delivered 14% growth in non-GAAP diluted EPS and a 62% increase in free cash flow. At more than $200 million, our free cash flow was 172% of non-GAAP net income. This performance enabled us to return $175 million to our shareholders through our share repurchase program during the fiscal year.
From a strategic perspective, we made important progress in fiscal year 2020 as we advanced our newest product innovations and combined our service assurance and security organizations and technologies to allow us to begin to deliver unique and valuable solutions to the market.
Looking Ahead to Fiscal Year 2021
We will undoubtedly continue to experience unprecedented, uncertain, and challenging times as the COVID-19 global pandemic extends into our fiscal year 2021. It is during times like these that I find that our purpose as "Guardians of the Connected World" is more relevant than ever. Our customers depend on NETSCOUT's service assurance and security solutions to assure and secure critical networks and infrastructure that connect people and support businesses around the globe. It is essential that these infrastructures continue to perform, even as they are stressed with unparalleled demand as much of the world works remotely. We are proud to provide such essential solutions and to support our customers during these critical times.
While this pandemic has brought about extreme uncertainty in many facets of life and business, I am deeply certain of two things:
• NETSCOUT can, and will, play a valuable role in getting the world through this crisis. Our unique solutions are critical and valuable to our customers to solve their most pressing network and security challenges.
• NETSCOUT is a strong company and will emerge from this crisis even stronger. We have navigated many challenging times during our 35 years in business and we are positioned well to do it again. We have great product solutions, a dedicated and talented team, a solid balance sheet, and a strong financial profile that will provide us the experience, liquidity, and flexibility necessary to weather this crisis.
Moving forward, we are well-positioned to fulfill our purpose as "Guardians of the Connected World." We remain encouraged about the opportunities we see, such as 5G in the service provider vertical and the advancement of digital transformation, security and also 5G in the enterprise vertical. We are harnessing the power of wire data to provide an integrated set of solutions based on "smart data." In doing so, we are solving our customers' most challenging network and security issues in a way that creates tremendous value for them. As they continue to build on their investments with us, they are reducing their cost of ownership and increasing their return on investment in our solutions. This gives them the confidence to innovate as we provide them "Visibility Without Borders," so that they can maintain control in their ever-changing worlds.
We remain committed to our "Lean But Not Mean" culture and will prioritize the health, safety and security of our people, partners, customers and stakeholders while also improving our operations and maintaining our disciplined approach to managing capital and expenses. For fiscal year 2021, we expect to once again deliver operating leverage, grow earnings per share, and produce strong free cash flow. We also plan to continue to innovate, advance, and invest in our technology and solutions to ensure that we maintain our industry leadership throughout this crisis and well into the future.
In closing, I would like to thank all the first responders who are working tirelessly to keep us safe, my fellow Guardians at NETSCOUT for their commitment and dedication, as well as our customers and stakeholders for their continued support. I look forward to sharing our continued progress and achievements with you over the course of fiscal year 2021 and hope that you and your families remain healthy and safe. I am confident that we will get through this global crisis together and emerge as a stronger Company and world.
Sincerely,
Anil Singhal
Co-Founder, President, Chief Executive Officer and Chairman of the Board
We are Guardians
Today's digital world moves at the speed of light. Modern technology allows communication to travel and information to be shared instantly across the globe. The connected world is only as strong as the people who protect it. NETSCOUT Guardians are an elite force of trailblazers, innovators, and problem solvers who take on the responsibility of tackling the world's most pressing network challenges.