NetScout Systems, Inc. · NASDAQ:NTCT
NetScout Systems — Q3 FY2017 Earnings Presentation
22 slides from NetScout Systems's earnings presentation, Jan 31, 2017
Slide 1: Q3 FY 2017 Conference Call
Q3 FY 2017 Conference Call NetScout Systems, Inc. January 31, 2017 ©2017 NETSCOUT
Slide 2: Agenda
Agenda • Introduction & Safe Harbor – Andrew Kramer, Vice President of Investor Relations • CEO Perspective – Anil Singhal, President and CEO • COO Update: Customer Use Cases & Business Initiatives – Michael Szabados, Chief Operating Officer • Financial Review and Fiscal Year 2017 Outlook – Jean Bua
Slide 3: Safe Harbor
Safe Harbor Forward Looking Statements: 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 thi
Slide 4: Non-GAAP Financial Metrics
Non-GAAP Financial Metrics Regulation G Disclosure: This presentation makes reference to certain non-GAAP measures such as non-GAAP total revenue, non-GAAP product revenue, non-GAAP service revenue, non-GAAP income from operations, non-GAAP net income, non-GAAP diluted net income per share, non-GAAP
Slide 5: CEO Perspective
CEO Perspective Anil Singhal Co-Founder, President and Chief Executive Officer N E T S CO U T.CO M
Slide 6: Q3 and First Nine Months FY'17 Performance
Q3 and First Nine Months FY’17 Performance • Q3 FY17 results were Non-GAAP Q3 FY16 Q3 FY17 % 9 Mos. FY16 (Pro Forma) 9 Mos. FY17 (Reported) % generally consistent with ($ in millions) 12/31/15 12/31/16 Change 12/31/15 12/31/16 Change our plans entering the Revenue $333.4 $311.4 -6.6% $890.0 $872.6 -
Slide 7: Recent Highlights
Recent Highlights • Important progress to further elevate our value proposition with both enterprise and service provider customers • Continued to build momentum with our new, real-time information platform, the InfiniStreamNG – Two large tier-one service providers began deployment of our InfiniStre
Slide 8: Outlook
Outlook • Focused on achieving our financial, product development and operational objectives for FY’17 • We plan to complete the balance of our highest priority development projects within the next several months • Overall, we remain cautiously optimistic about our prospects to accelerate our revenu
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer N E T S CO U T.CO M
Slide 10: COO Highlights
COO Highlights • Customer wins and use cases – InfiniStreamNG adoption • “Software only” wins – Enterprise – DDoS • Go-to-market activity ©2017 NETSCOUT 10 January 31, 2017
Slide 11: Financial Review Fiscal Year 2017 Outlook
Financial Review Fiscal Year 2017 Outlook Jean Bua Executive Vice President and Chief Financial Officer N E T S CO U T.CO M
Slide 12: Q3 and First Nine Months FY'17 Results
Q3 and First Nine Months FY’17 Results Q3 FY’16 Q3 FY’17 Q3 FY ’17 9 Mos. FY’16 9 Mos. FY’17 9 Mos. FY’17 Non-GAAP Non-GAAP GAAP Non-GAAP Non-GAAP GAAP Reported Reported % Reported Pro Forma Reported % Reported (in millions except EPS and % data) 12/31/15 12/31/16 Change 12/31/16 12/31/15 12/31/16 C
Slide 13: Balance Sheet Highlights & Free Cash Flow
Balance Sheet Highlights & Free Cash Flow (in millions) Free Cash Flow Ending Balance Sheet Q1 FY’17 Q2 FY’17 Q3 FY’17 9 Mos. FY’17 6/30/16 9/30/16 12/31/16 9/30/16 Q3 FY’17 Operating Cash Flow $37.7 $15.9 $78.3 $131.9 (Unaudited) 12/31/16 Purchase of Fixed Assets ($9.5) ($8.5) ($6.1) ($24.1) & Inta
Slide 14: FY 2017 Guidance
FY 2017 Guidance (in billions except EPS) Non-GAAP Low High Revenue $1.2 $1.2 EPS $1.87 $1.90 GAAP Low High Revenue $1.163 $1.163 EPS $0.40 $0.43 Guidance range adjusted to reflect assumptions for certain acquisition-related costs and expenses, year-to-date completed share repurchase, progress throu
Slide 15: Appendix
Appendix N E T S CO U T.CO M
Slide 16: FY 2017 Guidance: GAAP to Non-GAAP Reconciliation
FY 2017 Guidance: GAAP to Non-GAAP Reconciliation (in millions except EPS) Unaudited FY 2017 Low High GAAP revenue $ 1,163 $ 1,163 Deferred revenue fair value adjustment 26 26 Amortization of intangible assets 11 11 Non-GAAP revenue $ 1,200 $ 1,200 GAAP Net Income $ 37 $ 40 Deferred revenue fair val
Slide 17: Total Revenue Composition
Total Revenue Composition (in millions) YTD Q3 FY’16 Q3 FY’16 Q3 FY’17 Q3 FY’17 YTD Q3 FY’17 YTD Q3 FY’17 Pro Forma Non-GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP Total Revenue $333.4 $311.4 $302.2 $890.0 $872.6 $843.2 Product Revenue $216.4 $196.4 $192.0 $561.2 $540.1 $525.5 Service Revenue $116.9 $
Slide 18: Total Revenue by Geography
Total Revenue by Geography (GAAP, in millions) Q3 FY’17 YTD FY’17 FY’16 FY'16 Reported Reported Pro Forma* Pro Forma 12/31/16 12/31/16 Total Revenue $302.2 $843.2 $1,129.4 7% 70% 30% 8% 15% United States $181.9 $537.4 $794.7 International $120.3 $305.8 $334.8 YTD Q3 FY'17 Europe $57.3 $139.9 $167.0
Slide 19: GAAP to Non-GAAP, Pro Forma Detailed Reconciliation: Quarterly Revenue
GAAP to Non-GAAP, Pro Forma Detailed Reconciliation: Quarterly Revenue for First Nine Months FY ’16 Detailed Reconciliation of 9 Mos. FY16 GAAP Results to 9 Mos. FY16 Pro Forma, Non-GAAP Revenue (Unaudited) Q1FY16 Q1FY16 Q1FY16 Q2FY16 Q2FY16 Q2FY16 Q3FY16 9 Mos. FY16 (In millions) x-DHR NTCT Pro For
Slide 20: GAAP to Non-GAAP, Pro Forma Reconciliation: Gross Profit and Operating Profit
GAAP to Non-GAAP, Pro Forma Detailed Reconciliation: Gross Profit and Operating Profit for First Nine Months FY ‘16 Detailed Reconciliation of 9 Mos. FY16 GAAP Results to 9 Mos. FY16 Pro Forma, Non-GAAP Gross and Operating Profit (Unaudited) Q1FY16 Q1FY16 Q1FY16 Q2FY16 Q2FY16 Q2FY16 Q3FY16 9 Mos. FY
Slide 21: GAAP to Non-GAAP Reconciliation: Q3 FY'16, Q2 FY'17, Q3 FY'17
GAAP to Non-GAAP Reconciliation: Q3 FY’16, Q2 FY’17, Q3 FY’17 and YTD FY’16 and FY’17 NetScout Systems, Inc. NetScout Systems, Inc. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measure
Slide 22: Thank You
Thank You N E T S CO U T.CO M