Slide 1: Q3 FY 2024 Conference Call
Q3 FY 2024 Conference Call NETSCOUT SYSTEMS, INC. January 25, 2024 ©2024 NETSCOUT January 25, 2024 1
Slide 2: Agenda
Agenda • Introduction & Safe Harbor – Tony Piazza, SVP, Corporate Finance • CEO Perspective – Anil Singhal, President and CEO • COO Update – Michael Szabados, Chief Operating Officer • CFO Financial Review – Jean Bua, EVP and CFO 2 January 25, 2024
Slide 3: Safe Harbor
Safe Harbor Forward Looking Statements: Certain information provided in this presentation includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Liti
Slide 4: Non-GAAP Financial Metrics
Non-GAAP Financial Metrics January 25, 2024 4
Slide 5: CEO Perspective
CEO Perspective Anil Singhal President and Chief Executive Officer January 25, 2024
Slide 6: Q3 & YTD FY'24 Non-GAAP Financial Results
Q3 & YTD FY’24 Non-GAAP Financial Results Non-GAAP Q3 FY’24 Q3 FY’23 YTD FY'24 YTD FY'23 ($ in millions, except per share data) 12/31/2023 12/31/2022 12/31/2023 12/31/2022 Revenue $ 218.1 $ 269.5 $ 626.0 $ 706.4 Gross Margin 81.8% 80.5% 80.2% 77.5% Operating Margin 29.0% 35.5% 23.6% 24.6% EPS $ 0.73
Slide 7: Market and Business Insights
Market and Business Insights • Enterprise • Service Provider January 25, 2024 7
Slide 8: FY'24 Outlook & Summary
FY’24 Outlook & Summary • Revenue is expected to be at the low-end of the previously disclosed range due to the challenging current market conditions, primarily in the service assurance Tier-1 U.S. service provider market • Non-GAAP EPS is anticipated to be at the higher end of our previously disclo
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer January 25, 2024
Slide 10: COO Highlights
COO Highlights • Customer Wins • Go-to-Market Activities 10 January 25, 2024
Slide 11: Financial Review & FY'24 Outlook
Financial Review & FY’24 Outlook Jean Bua Executive Vice President and Chief Financial Officer January 25, 2024
Slide 12: Q3 & YTD Non-GAAP FY'24 Results
Q3 & YTD Non-GAAP FY’24 Results Q3 FY’24 Q3 FY’23 YTD FY'24 YTD FY'23 Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 12/31/2023 12/31/2022 Change 12/31/2023 12/31/2022 Change Revenue: Product $ 95.8 $ 149.5 -35.9% $ 271.0 $ 359.5 -24.6% Service $ 122.2 $ 120.1 1.8% $ 355
Slide 13: YTD FY'24 Revenue Trends: Customer Verticals & Product Lines
YTD FY’24 Revenue Trends: Customer Verticals & Product Lines Total Non-GAAP Revenue by Customer Vertical Total Non-GAAP Revenue by Product Line ($ in millions) ($ in millions) $706.4 $706.4 $626.0 $626.0 $177.7 $337.4 $201.6 25% $338.6 48% 32% 54% $528.8 $369.0 $424.4 75% $287.4 68% 52% 46% YTD Q3 F
Slide 14: YTD FY'24 Revenue Trends: Geographic Mix
YTD FY’24 Revenue Trends: Geographic Mix YTD FY’24 YTD FY’23 12/31/23 12/31/22 YTD FY’24 YTD FY’23 Total Revenue $626.0 $706.4 United States $367.1 $461.7 7% 6% International $258.9 $244.8 59% 41% 14% 18% 16% 65% 35% 15% Europe $111.5 $105.0 Asia $48.0 $44.6 Rest of World $99.4 $95.1 United States I
Slide 15: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q3 FY'24 Q1 FY’24 Q2 FY'24 Q3 FY'24 YTD FY'24 6/30/2023 9/30/2023 12/31/2023 12/31/2023 (Unaudited) 12/31/23 Operating Cash Flow $ (22.3) $ (26.4) $ 13.9 $ (34.8) Cash and Securities* $ 330.1 Purchase of Fixed Assets & Intangible Assets $
Slide 16: FY'24 Outlook
FY’24 Outlook Revenue FY’23 FY’24 Outlook Other FY’24 Outlook Assumptions $ millions GAAP & Non-GAAP GAAP & Non-GAAP Revenue $914.5 ~$840 • Anticipate tax rate near low end of 20% to 22% range EPS (Diluted) • Anticipate 72 to 73 million weighted average diluted shares outstanding FY’23 FY’24 Outlook
Slide 17: Appendix
Appendix January 25, 2024
Slide 18: Q3 & YTD FY'24 Results
Q3 & YTD FY’24 Results Q3 FY’24 Q3 FY’23 YTD FY'24 YTD FY'23 Q3 FY’24 Q3 FY’23 YTD FY'24 YTD FY'23 GAAP GAAP % GAAP GAAP % Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 12/31/2023 12/31/2022 Change 12/31/2023 12/31/2022 Change 12/31/2023 12/31/2022 Change 12/31/2023 12/
Slide 19: Total Revenue Composition: Service Assurance & Cybersecurity
Total Revenue Composition: Service Assurance & Cybersecurity (in millions, GAAP & Non-GAAP) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 FY’23 FY’23 FY’23 FY’23 FY’23 FY’24 FY’24 FY’24 Total Revenue 208.8 228.1 269.5 208.1 914.5 211.1 196.8 218.1 Service Assurance Revenue 149.6 167.3 211.8 149.9 678.7 146.1 129.4
Slide 20: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q3’FY24, Q3’FY23, Q2’FY24, YTD’FY24 & YTD’FY23 Gross Profit, Income from Operations and Net Income (loss) NETSCOUT SYSTEMS, INC. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures (In thousands, except per share data) (Unaudited) Thr
Slide 21: GAAP to Non-GAAP Reconciliation: Itemization
GAAP to Non-GAAP Reconciliation: Q3’FY24, Q3’FY23, Q2’FY24, YTD’FY24 & YTD’FY23 Itemization NETSCOUT SYSTEMS, INC. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures - Continued (In thousands) (Unaudited) Three Months Ended Three Months Ended Nine Months Ended Decem
Slide 22: FY'24 Financial Outlook: GAAP to Non-GAAP Reconciliation
FY’24 Financial Outlook: GAAP to Non-GAAP Reconciliation NETSCOUT SYSTEMS, INC Reconciliation of GAAP Financial Outlook to Non-GAAP Financial Outlook (Unaudited) (In millions, except net income per share - diluted) FY'23 FY'24 GAAP & Non-GAAP revenue $ 914.5 ~$840 million FY'23 FY'24 GAAP net income
Slide 23: Thank You
Thank You January 25, 2024