Slide 1: Q2 FY 2021 Conference Call
Q2 FY 2021 Conference Call NETSCOUT SYSTEMS, INC. October 29, 2020 ©2020 NETSCOUT October 29, 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, COO • CFO Financial Review – Jean Bua, EVP and CFO October 29, 2020 ©2020 NETSCOUT 2
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 C O U T.C O M October 29, 2020
Slide 6: Q2 FY’21 Non-GAAP Financial Results
Q2 FY’21 Non-GAAP Financial Results Non-GAAP Q2 FY’21 Q2 FY’20 1H FY'21 1H FY'20 ($ in millions, except per share data) 9/30/2020 9/30/2019 9/30/2020 9/30/2019 Revenue $ 205.3 $ 216.5 $ 389.2 $ 402.5 Gross Margin 74.7% 76.6% 74.7% 75.8% Operating Margin 19.4% 14.6% 15.5% 10.9% EPS $ 0.38 $ 0.28 $ 0.
Slide 7: Business Insights and Market Trends
Business Insights and Market Trends • Service Provider Vertical • Enterprise Vertical • Security Market October 29, 2020 ©2020 NETSCOUT 7
Slide 8: FY’21 Outlook & Summary
FY’21 Outlook & Summary • Our business has proven to be largely resilient during the global pandemic and uncertain macro-economic environment • However, we are not immune, and expect FY’21 results to be affected: • Expect revenue to decline in the mid-to-upper single digits, on a percentage basis, c
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer N E T S C O U T.C O M October 29, 2020
Slide 10: COO Highlights
COO Highlights • Customer Wins • Go-to-Market Activities October 29, 2020 ©2020 NETSCOUT 10
Slide 11: Financial Review & FY’21 Outlook
Financial Review & FY’21 Outlook Jean Bua Executive Vice President and Chief Financial Officer N E T S C O U T.C O M October 29, 2020
Slide 12: Q2 and 1H FY’21 Results
Q2 and 1H FY’21 Results Q2 FY’21 Q2 FY’20 1H FY’21 1H FY’20 Q2 FY’21 Q2 FY’20 1H FY’21 1H FY’20 GAAP GAAP % GAAP GAAP % Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 9/30/2020 9/30/2019 Change 9/30/2020 9/30/2019 Change 9/30/2020 9/30/2019 Change 9/30/2020 9/30/2019 Cha
Slide 13: 1st Half FY’21 Revenue Trends: Customer Verticals
1st Half FY’21 Revenue Trends: Customer Verticals Total Non-GAAP Revenue by Customer Vertical Total Non-GAAP Revenue Composition by Customer Vertical ($ in millions) 1H FY’21 1H FY’20 $389.2 $402.5 Non-GAAP Non-GAAP $195.8 $193.1 50% 50% 48% 52% $193.3 $209.4 1H FY'21 1H FY'20 Service Provider Enter
Slide 14: 1st Half FY’21 Revenue Trends: Geographic Mix on a GAAP Basis
1st Half FY’21 Revenue Trends: Geographic Mix on a GAAP Basis 1H FY’21 1H FY’20 GAAP GAAP 9/30/20 9/30/19 1H FY’21 1H FY’20 Total Revenue $389.2 $402.4 United States $227.4 $246.6 7% 7% 58% 42% 61% 39% 16% International $161.8 $155.8 19% 16% 16% Europe $72.7 $65.2 Asia $27.6 $25.7 Rest of World $61.
Slide 15: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q2 FY'21 Free Cash Flow (Unaudited) 9/30/20 Q1 FY’21 Q2 FY'21 1H FY'21 Cash and Securities* $ 427.8 6/30/2020 9/30/2020 9/30/2020 Operating Cash Flow $ 44.9 $ 11.7 $ 56.6 Accounts Receivable, Net $ 169.7 Purchase of Fixed Assets & Intangib
Slide 16: FY’21 Non-GAAP Outlook
FY’21 Non-GAAP Outlook FY’21 Capital Structure Items • Revenue – expect a decline in the mid-to- upper single digits, on a percentage basis, * Anticipate a tax rate of ~23% compared with FY’20 * Estimate ~74 million weighted average • EPS – anticipate EPS in-line with our FY’20 EPS diluted shares ou
Slide 17: Upcoming Investor Event
Upcoming Investor Event Date Event Location November 18, 2020 RBC Global Technology, Internet, Media, and Virtual Telecommunications Conference October 29, 2020 ©2020 NETSCOUT 17
Slide 18: Appendix
Appendix N E T S C O U T.C O M October 29, 2020
Slide 19: GAAP to Non-GAAP Reconciliation: Revenue
GAAP to Non-GAAP Reconciliation: Q2’FY21, Q2’FY20, Q1’FY21, 1H’FY21 & 1H’FY20 Revenue 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 Months Ended Six Months Ended S
Slide 20: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q2’FY21, Q2’FY20, Q1’FY21, 1H’FY21 & 1H’FY20 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 21: GAAP to Non-GAAP Reconciliation: Itemization
GAAP to Non-GAAP Reconciliation: Q2’FY21, Q2’FY20, Q1’FY21, 1H’FY21 & 1H’FY20 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 Six Months Ended Septembe
Slide 22: Thank You
Thank You N E T S C O U T.C O M October 29, 2020