Slide 1: Q2 FY 2024 Conference Call
Q2 FY 2024 Conference Call NETSCOUT SYSTEMS, INC. November 2, 2023 ©2023 NETSCOUT November 2, 2023 1
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 2 November 2, 2023
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: To supplement the financial measures presented in NETSCOUT's press release in accordance with accounting principles generally accepted in the United States (GAAP), NETSCOUT also reports the following non-GAAP measures: non-GAAP gross profit, non-GA
Slide 5: CEO Perspective
CEO Perspective Anil Singhal President and Chief Executive Officer November 2, 2023
Slide 6: Q2 & 1H FY'24 Non-GAAP Financial Results
Q2 & 1H FY’24 Non-GAAP Financial Results Non-GAAP Q2 FY’24 Q2 FY’23 1H FY'24 1H FY'23 ($ in millions, except per share data) 9/30/2023 9/30/2022 9/30/2023 9/30/2022 Revenue $ 196.8 $ 228.1 $ 407.9 $ 436.9 Gross Margin 80.3% 76.8% 79.3% 75.7% Operating Margin 28.0% 23.7% 20.8% 18.0% EPS $ 0.61 $ 0.57
Slide 7: Market and Business Insights
Market and Business Insights • Enterprise • Service Provider November 2, 2023 7
Slide 8: FY'24 Outlook & Summary
FY’24 Outlook & Summary • Updated outlook issued on October 16, 2023 • Committed to delivering FY’24 performance within updated outlook • Continue to position NETSCOUT to deliver long-term value • Long-term demand trends remain intact • NETSCOUT remains well-positioned to play a critical role in ena
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer November 2, 2023
Slide 10: COO Highlights
COO Highlights • Customer Wins • Go-to-Market Activities 10 November 2, 2023
Slide 11: Financial Review & FY'24 Outlook
Financial Review & FY’24 Outlook Jean Bua Executive Vice President and Chief Financial Officer November 2, 2023
Slide 12: Q2 & 1H FY'24 Results
Q2 & 1H FY’24 Results Q2 FY’24 Q2 FY’23 1H FY'24 1H FY'23 Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 9/30/2023 9/30/2022 Change 9/30/2023 9/30/2022 Change Revenue: Product $ 80.5 $ 111.8 -28.0% $ 175.2 $ 210.1 -16.6% Service $ 116.3 $ 116.3 0.0% $ 232.7 $ 226.8 2.6%
Slide 13: 1H FY'24 Revenue Trends: Customer Verticals & Product Lines
1H FY’24 Revenue Trends: Customer Verticals & Product Lines Total Non-GAAP Revenue by Customer Vertical Total Non-GAAP Revenue by Product Line ($ in millions) ($ in millions) $407.9 $436.9 $407.9 $436.9 $120.0 $224.1 $132.4 27% $217.6 32% 51% 53% $275.5 $316.9 $190.3 $212.8 68% 73% 47% 49% 1H FY'24
Slide 14: 1H FY'24 Revenue Trends: Geographic Mix
1H FY’24 Revenue Trends: Geographic Mix 1H FY’24 1H FY’23 9/30/23 9/30/22 1H FY’24 1H FY’23 Total Revenue $407.9 $436.9 United States $243.4 $280.5 7% 7% International $164.6 $156.4 60% 40% 17% 13% 16% 64% 36% Europe $66.2 $69.1 16% Asia $30.7 $29.2 Rest of World $67.7 $58.2 United States Internatio
Slide 15: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q2 FY'24 Q1 FY’24 Q2 FY'24 1H FY'24 6/30/2023 9/30/2023 9/30/2023 (Unaudited) 9/30/23 Operating Cash Flow $ (22.3) $ (26.4) $ (48.7) Cash and Securities* $ 332.6 Purchase of Fixed Assets & Intangible Assets $ (2.0) $ (1.5) $ (3.5) Free Cas
Slide 16: FY'24 Outlook
FY’24 Outlook Revenue FY’23 FY’24 Outlook Other FY’24 Outlook Assumptions $ millions GAAP & Non-GAAP GAAP & Non-GAAP Revenue $914.5 ~$840 to ~$860 * Anticipate effective tax rate to be in the range of 20% to 22% EPS (Diluted) * Anticipate 73 to 74 million weighted average diluted shares outstanding
Slide 17: Upcoming Investor Events
Upcoming Investor Events Date Event Location November 14, 2023 Needham Virtual Security, Networking, Virtual and Communications Conference November 15, 2023 2023 RBC Capital Markets Global Technology, New York, NY Internet, Media, and Telecom Conference November 29, 2023 UBS Global Technology Confer
Slide 18: Appendix
Appendix November 2, 2023
Slide 19: Q2 & 1H FY'24 Results
Q2 & 1H FY’24 Results Q2 FY’24 Q2 FY’23 1H FY'24 1H FY'23 Q2 FY’24 Q2 FY’23 1H FY'24 1H FY'23 GAAP GAAP % GAAP GAAP % Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 9/30/2023 9/30/2022 Change 9/30/2023 9/30/2022 Change 9/30/2023 9/30/2022 Change 9/30/2023 9/30/2022 Chang
Slide 20: Total Revenue Composition: Service Assurance & Cybersecurity
Total Revenue Composition: Service Assurance & Cybersecurity (in millions, GAAP & Non-GAAP) Full Year Q1 FY’23 Q2 FY’23 Q3 FY’23 Q4 FY’23 FY’23 Q1 FY’24 Q2 FY’24 Total Revenue 208.8 228.1 269.5 208.1 914.5 211.1 196.8 Service Assurance Revenue 149.6 167.3 211.8 149.9 678.7 146.1 129.4 Cybersecurity
Slide 21: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q2’FY24, Q2’FY23, Q1’FY23, 1H’FY24 & 1H’FY23 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 22: GAAP to Non-GAAP Reconciliation: Itemization
GAAP to Non-GAAP Reconciliation: Q2’FY24, Q2’FY23, Q1’FY23, 1H’FY24 & 1H’FY23 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 23: FY'24 Financial Outlook: GAAP to Non-GAAP Reconciliation
FY’24 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'23 FY'24 GAAP & Non-GAAP revenue $ 914.5 ~$840 million to ~$860 million FY'23 FY'2
Slide 24: Thank You
Thank You November 2, 2023