Netscout Systems, Inc. · NASDAQ:NTCT

Netscout Systems — Q1 FY2020 Earnings Presentation

25 slides from Netscout Systems's earnings presentation, Aug 1, 2019

  1. Slide 1: Q1 FY 2020 Conference Call

    Q1 FY 2020 Conference Call NETSCOUT SYSTEMS, INC. August 1, 2019 ©2019 NETSCOUT August 1, 2019

  2. Slide 2: Agenda

    Agenda • Introduction & Safe Harbor – Anthony Piazza, Vice President, Corporate Finance • CEO Perspective – Anil Singhal, President and CEO • COO Update – Michael Szabados, Chief Operating Officer • Financial Review and FY’20 Outlook – Jean Bua, EVP and CFO ©2019 NETSCOUT 2 August 1, 2019

  3. Slide 3: Safe Harbor

    Safe Harbor Forward Looking Statements: Forward-looking statements in this communication are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and other federal securities laws. Investors are cautioned that statements in this communication, which are n

  4. Slide 4: Non-GAAP Financial Metrics

    Non-GAAP Financial Metrics Regulation G Disclosure: This presentation makes reference to the following non-GAAP metrics: non-GAAP total revenue, non-GAAP product revenue, non-GAAP service revenue, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, and non-GAAP net incom

  5. Slide 5: CEO Perspective

    CEO Perspective Anil Singhal President and Chief Executive Officer N E T S C O U T. C O M August 1,26, October 2019 2017

  6. Slide 6: Q1 FY'20 Financial Highlights

    Q1 FY’20 Financial Highlights Non-GAAP Q1 FY’20 Q1 FY’19 ($ in millions, except per share data) 6/30/2019 6/30/2018 Revenue $ 186.1 $ 206.0 Gross Margin 74.9% 74.8% Operating Margin 6.5% 3.6% EPS $ 0.07 $ 0.03 • Revenue ~$10 million lower than anticipated due to continued constrained spending and el

  7. Slide 7: Business Trends

    Business Trends • Service Provider • 5G momentum • Enterprise • Rebuilding international sales force momentum • Security • Arbor Threat Analytics and Cyber Threat Horizon ©2019 NETSCOUT 7 August 1, 2019

  8. Slide 8: FY'20 Outlook & Summary

    FY’20 Outlook & Summary • We remain excited about the opportunities we are seeing and our ability to capitalize on them • We remain focused on generating low-single digit organic revenue growth, which would translate into a range of $895 million to $915 million of non-GAAP revenue for the fiscal yea

  9. Slide 9: COO Update

    COO Update Michael Szabados Chief Operating Officer N E T S C O U T. C O M August 1,26, October 2019 2017

  10. Slide 10: COO Highlights

    COO Highlights • Customer Wins • Go-to-market Activity ©2019 NETSCOUT 10 August 1, 2019

  11. Slide 11: Financial Review & FY'20 Outlook

    Financial Review & FY’20 Outlook Jean Bua Executive Vice President and Chief Financial Officer N E T S C O U T. C O M August 1,26, October 2019 2017

  12. Slide 12: Q1 FY'20 Results

    Q1 FY’20 Results Q1 FY’20 Q1 FY’19 Q1 FY’20 Q1 FY’19 GAAP GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 6/30/2019 6/30/2018 Change 6/30/2019 6/30/2018 Change Revenue: Product $ 75.7 $ 96.9 -21.9% $ 75.7 $ 97.3 -22.2% Service $ 110.3 $ 108.2 2.0% $ 110.4 $ 108.7 1.6% Total revenue $

  13. Slide 13: Q1 FY'20 Revenue Trends: Customer Verticals & Geographic Mix

    Q1 FY’20 Revenue Trends: Customer Verticals & Geographic Mix Total Non-GAAP Revenue by Customer Segment Total Non-GAAP Revenue Composition by Customer Segment ($ in millions) Q1 FY’20 Q1 FY’19 $186.1 $206.0 Non-GAAP Non-GAAP $86.2 $103.0 46% 54% 50% 50% $99.9 $103.0 FY'20 FY'19 Service Provider Ente

  14. Slide 14: GAAP Balance Sheet Highlights & Free Cash Flow

    GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q1 FY'20 Free Cash Flow Q1 FY’20 (Unaudited) 6/30/19 6/30/2019 Cash and Securities* $ 443.2 Operating Cash Flow $ 49.5 Purchase of Fixed Assets & Intangible Assets $ (3.3) Accounts Receivable, Net $ 160.0 Free Cash Flow $ 46.2 Inventories

  15. Slide 15: FY'20 Guidance

    FY’20 Guidance Revenue FY’19 FY’19 FY’20 Guidance Other FY’20 Guidance Assumptions $ millions GAAP Non-GAAP GAAP & Non-GAAP * Anticipated gross profit margin Revenue $909.9 $911.5 ~$895 to ~$915 between 77% to 78% HNT Tools ($18.0) ($18.0) - * Operating expenses expected to range Organic Revenue $89

  16. Slide 16: Upcoming Investor Events

    Upcoming Investor Events Date Event Location August 7, 2019 Oppenheimer Annual Technology, Internet & Boston, MA Communications Conference August 13, 2019 KeyBanc Capital Markets Annual Technology Vail, CO Leadership Forum ©2019 NETSCOUT 16 August 1, 2019

  17. Slide 17: Appendix

    Appendix N E T S C O U T. C O M August 1,26, October 2019 2017

  18. Slide 18: FY'20 Guidance: GAAP to Non-GAAP Reconciliation

    FY’20 Guidance: GAAP to Non-GAAP Reconciliation NETSCOUT SYSTEMS, INC Reconciliation of GAAP Financial Guidance to Non-GAAP Financial Guidance (Unaudited) (In millions, except net income per share - diluted) FY'19 FY'20 GAAP revenue $ 909.9 ~$895 million to ~$915 million Deferred service revenue fai

  19. Slide 19: Q2 FY'20 Guidance: GAAP to Non-GAAP Reconciliation

    Q2 FY’20 Guidance: GAAP to Non-GAAP Reconciliation NETSCOUT SYSTEMS, INC Reconciliation of GAAP Financial Guidance to Non-GAAP Financial Guidance (Unaudited) (In millions, except net income per share - diluted) Q2 FY'19 Q2 FY'20 GAAP revenue $ 223.8 ~$205 million to ~$215 million Deferred service re

  20. Slide 20: Total Revenue Composition

    Total Revenue Composition (in millions) Q1 Q1 Q1 Q1 FY'20 FY'19 FY'20 FY'19 GAAP GAAP Non-GAAP Non-GAAP Total Revenue $186.0 $205.1 $186.1 $206.0 Product Revenue $75.7 $96.9 $75.7 $97.3 Service Revenue $110.3 $108.2 $110.4 $108.7 Certain numbers may not total due to rounding ©2019 NETSCOUT 20 August

  21. Slide 21: GAAP to Non-GAAP Reconciliation: Q1 FY'20, Q1 FY'19, and Q4 FY'19 Revenue

    GAAP to Non-GAAP Reconciliation: Q1 FY’20, Q1 FY’19, and Q4 FY’19 Revenue NETSCOUT SYSTEMS, INC. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures (In thousands) (Unaudited) Three Months Ended Three Months Ended June 30, March 31, 2019 2018 2019 Product Revenue (GA

  22. Slide 22: GAAP to Non-GAAP Reconciliation: Q1 FY'20 and Q1 FY'19 Organic Non-GAAP Revenue

    GAAP to Non-GAAP Reconciliation: Q1 FY’20 and Q1 FY’19 Organic Non-GAAP Revenue NETSCOUT SYSTEMS, INC. Reconciliation of GAAP Revenue to Non-GAAP Organic Revenue (In thousands) (Unaudited) Three Months Ended June 30, 2019 2018 GAAP Product Revenue $ 75,719 $ 96,927 Adjustments - 391 Non-GAAP Product

  23. Slide 23: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income

    GAAP to Non-GAAP Reconciliation: Q1 FY’20, Q1 FY’19 and Q4 FY’19 Gross Profit, Income from Operations and Net Income NETSCOUT SYSTEMS, INC. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures (In thousands, except per share data) (Unaudited) Three Months Ended Three

  24. Slide 24: GAAP to Non-GAAP Reconciliation: Itemization

    GAAP to Non-GAAP Reconciliation: Q1 FY’20, Q1 FY’19 and Q4 FY’19 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 June 30, March 31, 2019 2018 2019 (1)

  25. Slide 25: Thank You

    Thank You N E T S C O U T. C O M August 1,26, October 2019 2017

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