Slide 1: Q4 & FY 2020 Conference Call
Q4 & FY 2020 Conference Call NETSCOUT SYSTEMS, INC. May 7, 2020 ©2020 NETSCOUT May 7, 2020
Slide 2: Agenda
Agenda • Introduction & Safe Harbor – Tony Piazza, Vice President, Corporate Finance • CEO Perspective – Anil Singhal, President and CEO • COO Update – Michael Szabados, Chief Operating Officer • CFO Financial Review – Jean Bua, EVP and CFO ©2020 NETSCOUT 2 May 7, 2020
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
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 gross profit, non-GAAP operating margin, non-GAAP net income,
Slide 5: CEO Perspective
CEO Perspective Anil Singhal President and Chief Executive Officer N E T S CO U T.CO M May 7, 2020
Slide 6: Introductory Comments
Introductory Comments • Our purpose as “Guardians of the Connected World” has never been more important than it is in these unprecedented and challenging times • We continue to effectively operate our business to support our customers • Our “Lean but not Mean” culture prioritizes the health & safety
Slide 7: FY'20 Non-GAAP Financial Results
FY’20 Non-GAAP Financial Results Non-GAAP FY'20 FY'19 ($ in millions, except per share data) 3/31/2020 3/31/2019 Note: FY2019 includes $18M of Revenue $ 892.0 $ 911.5 revenue related to the divested Gross Margin 76.4% 76.4% HNT tools business. Operating Margin 18.3% 17.7% EPS $ 1.57 $ 1.38 • Solid E
Slide 8: Q4 FY'20 Non-GAAP Financial Results
Q4 FY’20 Non-GAAP Financial Results Non-GAAP Q4 FY’20 Q4 FY’19 ($ in millions, except per share data) 3/31/2020 3/31/2019 Revenue $ 229.4 $ 235.3 Gross Margin 76.0% 79.0% Operating Margin 21.2% 29.2% EPS $ 0.50 $ 0.66 Non-GAAP • Revenue lower than expected due to the COVID-19 global pandemic ($ in m
Slide 9: FY'21 Outlook & Trends
FY’21 Outlook & Trends Outlook • Our unique solutions can assist customers with addressing unexpected challenges resulting from the pandemic • We remain encouraged about the opportunities we see and our ability to capitalize on them • We will defer providing fiscal year 2021 guidance until there is
Slide 10: COO Update
COO Update Michael Szabados Chief Operating Officer N E T S CO U T.CO M May 7, 2020
Slide 11: COO Highlights
COO Highlights • Customer wins • Go-to-market activities ©2020 NETSCOUT 11 May 7, 2020
Slide 12: Financial Review & FY'21 Outlook
Financial Review & FY’21 Outlook Jean Bua Executive Vice President and Chief Financial Officer N E T S CO U T.CO M May 7, 2020
Slide 13: Q4 FY'20 & FY'20 Results
Q4 FY’20 & FY’20 Results Q4 FY’20 Q4 FY’19 Q4 FY’20 Q4 FY’19 FY’20 FY’19 FY’20 FY’19 Non-GAAP Non-GAAP % GAAP GAAP % Non-GAAP Non-GAAP % GAAP GAAP % (in millions except EPS and % data) 3/31/2020 3/31/2019 Change 3/31/2020 3/31/2019 Change 3/31/2020 3/31/2019 Change 3/31/2020 3/31/2019 Change Revenue
Slide 14: FY'20 Revenue Trends: Customer Verticals Excluding HNT Tools Divestiture
FY’20 Revenue Trends: Customer Verticals Excluding HNT Tools Divestiture Total Non-GAAP Revenue by Customer Vertical Total Non-GAAP Revenue Composition by Customer Vertical ($ in millions) FY’20 FY’19 $892.0 $893.5 Non-GAAP Non-GAAP $431.8 $437.8 48% 52% 49% 51% $460.2 $455.7 FY'20 FY'19 Service Pro
Slide 15: FY'20 Revenue Trends: Geographic Mix on a GAAP Basis
FY’20 Revenue Trends: Geographic Mix on a GAAP Basis Note: FY2019 includes $18M of revenue related to the divested HNT tools business. FY’20 FY’19 GAAP GAAP 3/31/20 3/31/19 FY’20 FY’19 Total Revenue $891.8 $909.9 United States $545.6 $553.3 7% 8% International $346.2 $356.7 61% 39% 15% 61% 39% 15% 1
Slide 16: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q4 FY'20 Free Cash Flow (Unaudited) 3/31/20 Q1 FY’20 Q2 FY'20 Q3 FY'20 Q4 FY'20 FY'20 Cash and Securities* $ 389.1 6/30/2019 9/30/2019 12/31/2019 3/31/2020 3/31/2020 Operating Cash Flow $ 49.5 $ (1.0) $ 69.3 $ 107.2 $ 225.0 Accounts Receiv
Slide 17: FY'21 Commentary
FY’21 Commentary Given the rapidly evolving COVID-19 situation, it Q1 FY’21 Capital Structure Items is not possible, with reasonable accuracy, to estimate the impact of the pandemic on future * Anticipate a tax rate of 23%, financial performance. Therefore, the Company consistent with Q1 of the prio
Slide 18: Upcoming Investor Events
Upcoming Investor Events Date Event Location May 20, 2020 15th Annual Needham Virtual Technology & Media Virtual Conference June 3, 2020 Baird 2020 Global Consumer, Technology & Services Virtual Conference ©2020 NETSCOUT 18 May 7, 2020
Slide 19: Appendix
Appendix N E T S CO U T.CO M May 7, 2020
Slide 20: Total Revenue Composition
Total Revenue Composition (in millions) Q4 FY'20 Q4 FY'19 FY'20 FY'19 Q4 FY'20 Q4 FY'19 FY'20 FY'19 3/31/2020 3/31/2019 3/31/2020 3/31/2019 3/31/2020 3/31/2019 3/31/2020 3/31/2019 GAAP GAAP GAAP GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Total Revenue $229.3 $235.0 $891.8 $909.9 $229.4 $235.3 $892.0 $
Slide 21: GAAP to Non-GAAP Reconciliation: Revenue
GAAP to Non-GAAP Reconciliation: Q4 FY’20, Q4 FY’19, Q3 FY’20, FY’20 & FY’19 Revenue Three Months Ended Three Months Ended Twelve Months Ended March 31, December 31, March 31, 2020 2019 2019 2020 2019 Product Revenue (GAAP) $ 116,538 $ 125,474 $ 143,309 $ 438,341 $ 467,289 Product deferred revenue f
Slide 22: GAAP to Non-GAAP Reconciliation: Organic Non-GAAP Revenue
GAAP to Non-GAAP Reconciliation: Q4 FY’20, Q4 FY’19, FY’20 & FY’19 Organic Non-GAAP Revenue Three Months Ended Twelve Months Ended March 31, March 31, 2020 2019 2020 2019 GAAP Product Revenue $ 116,538 $ 125,474 $ 438,341 $ 467,289 Adjustments - - - 391 Non-GAAP Product Revenue $ 116,538 $ 125,474 $
Slide 23: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q4 FY’20, Q4 FY’19, Q3 FY’20, FY’20 & FY’19 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) Three
Slide 24: GAAP to Non-GAAP Reconciliation: Itemization
GAAP to Non-GAAP Reconciliation: Q4 FY’20, Q4 FY’19, Q3 FY’20, FY’20 & 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 Twelve Months Ended March
Slide 25: Thank You
Thank You N E T S CO U T.CO M May 7, 2020