Slide 1: Q2 FY 2023 Conference Call
Q2 FY 2023 Conference Call NETSCOUT SYSTEMS, INC. October 27, 2022 ©2022 NETSCOUT October 27, 2022
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 October 27, 2022 ©2022 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, and non- GAAP net income per share (diluted), and free cash flow. Non-GAAP gross profit removes expens
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 27, 2022
Slide 6: Q2 & 1H FY'23 Non-GAAP Financial Results
Q2 & 1H FY’23 Non-GAAP Financial Results Non-GAAP Q2 FY’23 Q2 FY’22 1H FY'23 1H FY'22 ($ in millions, except per share data) 9/30/2022 9/30/2021 9/30/2022 9/30/2021 Revenue $ 228.1 $ 211.9 $ 436.9 $ 402.2 Gross Margin 76.8% 78.3% 75.7% 76.3% Operating Margin 23.7% 22.3% 18.0% 17.2% EPS $ 0.57 $ 0.47
Slide 7: Market and Business Insights
Market and Business Insights • Cybersecurity Market • Service Provider • Enterprise October 27, 2022 ©2022 NETSCOUT 7
Slide 8: FY'23 Outlook & Summary
FY’23 Outlook & Summary • We will continue to manage our operations prudently, taking a balanced approach to revenue growth and profitability • While we recognize the current macroeconomic uncertainty, we also remain confident about our business prospects and excited about the market opportunities w
Slide 9: COO Update
COO Update Michael Szabados Chief Operating Officer N E T S C O U T.C O M October 27, 2022
Slide 10: COO Highlights
COO Highlights • Customer Wins • Go-to-Market Activities October 27, 2022 ©2022 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 C O U T.C O M October 27, 2022
Slide 12: Q2 & 1H FY'23 Results
Q2 & 1H FY’23 Results Q2 FY’23 Q2 FY’22 1H FY'23 1H FY'22 Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 9/30/2022 9/30/2021 Change 9/30/2022 9/30/2021 Change Revenue: Product $ 111.8 $ 101.6 10.0% $ 210.1 $ 183.6 14.4% Service $ 116.3 $ 110.3 5.4% $ 226.8 $ 218.6 3.8% T
Slide 13: 1H FY'23 Revenue Trends: Customer Verticals & Product Lines
1H 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) $436.9 $402.2 $436.9 $402.2 $120.0 $105.0 $224.1 27% $210.6 26% 51% 52% $316.9 $297.2 $212.7 $191.6 73% 74% 49% 48% 1H FY'23
Slide 14: 1H FY'23 Revenue Trends: Geographic Mix
1H FY’23 Revenue Trends: Geographic Mix 1H FY’23 1H FY’22 9/30/22 9/30/21 1H FY’23 1H FY’22 Total Revenue $436.9 $402.2 United States $280.5 $236.6 7% 8% International $156.4 $165.6 13% 64% 36% 59% 41% 16% 18% 15% Europe $69.1 $73.1 Asia $29.2 $32.3 Rest of World $58.2 $60.2 United States Internatio
Slide 15: GAAP Balance Sheet Highlights & Free Cash Flow
GAAP Balance Sheet Highlights & Free Cash Flow (in millions) Q1 FY’23 Q2 FY'23 1H FY'23 Q2 FY'23 6/30/2022 9/30/2022 9/30/2022 (Unaudited) 9/30/22 Operating Cash Flow $ (12.5) $ 10.1 $ (2.4) Cash and Securities* $ 367.1 Purchase of Fixed Assets & Intangible Assets $ (2.4) $ (3.0) $ (5.4) Free Cash F
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 ~$895 to ~$925 * 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: Upcoming Investor Events
Upcoming Investor Events Date Event Location November 15, 2022 Needham’s 16th Annual Security, Networking, Virtual and Communications Conference November 16, 2022 2022 RBC Capital Markets Global Technology, Internet, New York City Media, and Telecom Conference November 30, 2022 Credit Suisse 26th An
Slide 18: Appendix
Appendix N E T S C O U T.C O M October 27, 2022
Slide 19: Q2 & 1H FY'23 Results
Q2 & 1H FY’23 Results Q2 FY’23 Q2 FY’22 1H FY'23 1H FY'22 Q2 FY’23 Q2 FY’22 1H FY'23 1H FY'22 GAAP GAAP % GAAP GAAP % Non-GAAP Non-GAAP % Non-GAAP Non-GAAP % (in millions except EPS and % data) 9/30/2022 9/30/2021 Change 9/30/2022 9/30/2021 Change 9/30/2022 9/30/2021 Change 9/30/2022 9/30/2021 Chang
Slide 20: Total Revenue Composition: Service Assurance & Cybersecurity
Total Revenue Composition: Service Assurance & Cybersecurity (in millions, GAAP & Non-GAAP) Full Year Q1 FY’22 Q2 FY’22 Q3 FY’22 Q4 FY’22 FY’22 Q1 FY’23 Q2 FY’23 Total Revenue 190.3 211.9 262.2 191.2 855.6 208.8 228.1 Service Assurance Revenue 134.8 162.5 191.8 133.9 623.0 149.6 167.3 Cybersecurity
Slide 21: 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 ~$895 million to ~$925 million FY'22 FY'2
Slide 22: GAAP to Non-GAAP Reconciliation: Gross Profit, Income from Operations and Net Income
GAAP to Non-GAAP Reconciliation: Q2’FY23, Q2’FY22, Q1’FY23, 1H’FY23 & 1H’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) Three
Slide 23: GAAP to Non-GAAP Reconciliation: Itemization
GAAP to Non-GAAP Reconciliation: Q2’FY23, Q2’FY22, Q1’FY23, 1H’FY23 & 1H’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 Six Months Ended Septembe
Slide 24: Thank You
Thank You N E T S C O U T.C O M October 27, 2022