Slide 1: Q3 FY 2023 Conference Call
Q3 FY 2023 Conference Call NETSCOUT SYSTEMS, INC. January 26, 2023 ©2023 NETSCOUT January 26, 2023
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 January 26, 2023 ©2023 NETSCOUT 2
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 Regulation G Disclosure: This presentation makes reference to the following non-GAAP metrics: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share (diluted) and non-GAAP earnings before interest and other expense, incom
Slide 5: CEO Perspective
CEO Perspective Anil Singhal President and Chief Executive Officer N E T S CO U T.CO M January 26, 2023
Slide 6: Q3 & YTD FY'23 Non-GAAP Financial Results
Q3 & YTD FY’23 Non-GAAP Financial Results Non-GAAP Q3 FY’23 Q3 FY’22 YTD FY'23 YTD FY'22 ($ in millions, except per share data) 12/31/2022 12/31/2021 12/31/2022 12/31/2021 Revenue $ 269.5 $ 262.2 $ 706.4 $ 664.4 Gross Margin 80.5% 78.8% 77.5% 77.3% Operating Margin 35.5% 33.2% 24.6% 23.5% EPS $ 1.00
Slide 7: Market and Business Insights
Market and Business Insights • Service Provider • Enterprise January 26, 2023 ©2023 NETSCOUT 7
Slide 8: FY'23 Outlook & Summary
FY’23 Outlook & Summary • We continue to play a mission-critical role for organizations around the globe with our service assurance and cybersecurity platform • Based on our increased visibility, we are updating our FY23 outlook to reflect a narrower revenue range (maintaining the midpoint) and incr
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer N E T S CO U T.CO M January 26, 2023
Slide 10: COO Highlights
COO Highlights • Customer Wins • Go-to-Market Activities January 26, 2023 ©2023 NETSCOUT 10
Slide 11: Financial Review & FY'23 Outlook
Financial Review & FY’23 Outlook Jean Bua Executive Vice President and Chief Financial Officer N E T S CO U T.CO M January 26, 2023
Slide 12: Q3 & YTD FY'23 Results
Q3 & YTD FY’23 Results Q3 FY’23 Q3 FY’22 YTD FY'23 YTD FY'22 Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 12/31/2022 12/31/2021 Change 12/31/2022 12/31/2021 Change Revenue: Product $ 149.5 $ 144.4 3.5% $ 359.5 $ 328.0 9.6% Service $ 120.1 $ 117.8 2.0% $ 346.9 $ 336.4 3
Slide 13: YTD FY'23 Revenue Trends: Customer Verticals & Product Lines
YTD FY’23 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 $664.4 $706.4 $664.4 $177.7 $175.3 $337.4 25% $326.8 26% 48% 49% $528.7 $489.1 $369.0 $337.6 75% 74% 52% 51% YTD FY'2
Slide 14: YTD FY'23 Revenue Trends: Geographic Mix
YTD FY’23 Revenue Trends: Geographic Mix YTD FY’23 YTD FY’22 12/31/22 12/31/21 YTD FY’23 YTD FY’22 Total Revenue $706.4 $664.4 United States $461.7 $399.4 6% 7% International $244.8 $265.0 14% 65% 35% 60% 40% 15% 18% 15% Europe $105.0 $121.7 Asia $44.6 $46.8 Rest of World $95.1 $96.5 United States I
Slide 15: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q1 FY’23 Q2 FY'23 Q3 FY'23 YTD FY'23 Q3 FY'23 6/30/2022 9/30/2022 12/31/2022 12/31/2022 (Unaudited) 12/31/22 Operating Cash Flow $ (12.5) $ 10.1 $ 46.3 $ 43.9 Cash and Securities* $ 416.2 Purchase of Fixed Assets & Intangible Assets $ (2.4
Slide 16: FY'23 Outlook
FY’23 Outlook Revenue FY’22 FY’23 Outlook Other FY’23 Outlook Assumptions $ millions GAAP &Non-GAAP GAAP & Non-GAAP Revenue $855.6 ~$905 to ~$915 * Tax rate anticipated to be in the range of 20% and 22% EPS (Diluted) * Approximately 73 million to 74 million weighted average diluted shares FY’22 FY’2
Slide 17: Appendix
Appendix N E T S CO U T.CO M January 26, 2023
Slide 18: Q3 & YTD FY'23 Results
Q3 & YTD FY’23 Results Q3 FY’23 Q3 FY’22 YTD FY'23 YTD FY'22 Q3 FY’23 Q3 FY’22 YTD FY'23 YTD FY'22 GAAP GAAP % GAAP GAAP % Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 12/31/2022 12/31/2021 Change 12/31/2022 12/31/2021 Change 12/31/2022 12/31/2021 Change 12/31/2022 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’22 FY’22 FY’22 FY’22 FY’22 FY’23 FY’23 FY’23 Total Revenue 190.3 211.9 262.2 191.2 855.6 208.8 228.1 269.5 Service Assurance 134.8 162.5 191.8 133.9 623.0 149.6 167.3 211.8 R
Slide 20: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q3’FY23, Q3’FY22, Q2’FY23, YTD’FY23 & YTD’FY22 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’FY23, Q3’FY22, Q2’FY23, YTD’FY23 & YTD’FY22 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'23 Financial Outlook: GAAP to Non-GAAP Reconciliation
FY’23 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'22 FY'23 GAAP & Non-GAAP revenue $ 855.6 ~$905 million to ~$915 million FY'22 FY'
Slide 23: Thank You
Thank You N E T S CO U T.CO M January 26, 2023