Netscout Systems, Inc. · NASDAQ:NTCT
Netscout Systems — Jefferies Technology Conference 2016
21 slides from Netscout Systems's conference presentation, May 12, 2016
Slide 1: Jefferies Technology Conference
Jefferies Technology Conference Jean Bua EVP and CFO May 12, 2016
Slide 2: Safe Harbor & Non-GAAP Financial Metrics
Safe Harbor & Non-GAAP Financial Metrics 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 th
Slide 3: NetScout – Investment Profile
Market cap as of 5/6/16 * Pro Forma Ticker Market FY’16 FY’16 NetScout – Investment Profile Symbol Cap Revenue* OpMargin* NTCT $2.3B $1.2B 21.0% • July 2015 acquisition combines the market leaders in Enterprise, Service Provider and Cybersecurity (DDoS) • Tangible operating margin improvement: Enter
Slide 4: What We Do
What We Do Our software based on quality data captures the actual traffic over our customers’ networks and transforms the data into operational intelligence and performance analytics….in real-time…and answers questions including: Is the user experiencing difficulty in Where is my network traffic sur
Slide 5: A Compelling Value Proposition
A Compelling Value Proposition Information and ~30% of wireless Communications Systems churn happens Downtime Costs North due to network American Businesses quality issues $700mm Per Year IHS Technology, The Cost of Server, Application, Nokia Siemens Networks survey and Network Downtime, January 201
Slide 6: New Product Cycle Addressing Next-Generation Technology Challenges
New Product Cycle Addressing Next- Generation Technology Challenges Mobility Integration of market-leading subscriber troubleshooting with Next-Gen Instrumentation proactive monitoring-based intelligence and analytics Lower Cost, Agile, Scalable, Software-based Real-Time Actionable Intelligence Adva
Slide 7: A Blue-Chip Customer Base with Leadership Across Multiple Market Segments
A Blue-Chip Customer Base with Leadership Across Multiple Market Segments Network Performance Service Provider Management Service Assurance (Probes) Global Reach in 100+ Countries ~$2.7B ~$1.3B 14% Other, 26% TekComms, Other, 31% Fluke 29% Networks, 7% CA Technologies, Astellia, 4% InfoVista, 2% 11%
Slide 8: Participating in Growth-Oriented Markets
Participating in Growth-Oriented Markets Sectors FORECAST* REVENUE SYNERGIES ($ in billions) $3.6 $2.7 6% CAGR • Best-in-class service assurance Network Performance Mgmt. solutions for enterprise and SP 2013 2018 $4.8 ($ in billions) 12% CAGR $2.5 • Service triage reduces “MTTR” for Application Perf
Slide 9: Financial Review
Financial Review
Slide 10: Q4 & FY '16 Performance
Q4 & FY ’16 Performance • Q4 and FY 16 revenue and EPS at the high end of revised guidance FY15 FY16 FY17 • Pro forma FY16 operating margin increases ($ in billions) Pro Forma Pro Forma Guidance to 21.0% from 18.8% on pro forma revenue growth of 2.5% Revenue $1.169 $1.199 $1.20 to $1.25 Gross Margin
Slide 11: FY'17: Focused on Driving Substantial Gains in Pro Forma Profitability
FY’17: Focused on Driving Substantial Gains in Pro Forma Profitability on Relatively Modest Revenue Growth Annual Revenue Profitability $1,500 ($ in millions) 74.4% 75.0% 75.5%+ $1,200 - $1,250 $1,169 $1,199 $1,000 $500 23% - 25%+ 21.0% 18.8% $- FY15pf FY16pf FY17e FY15pf FY16pf FY17e Gross Margin O
Slide 12: Total Revenue – By Market & Geography
Total Revenue – By Market & Geography FY’16 (Non-GAAP, $ in millions) Pro Forma FY'16 Revenue by Geography * Total Revenue $1,198.7 (Pro Forma) Product Revenue $761.4 Service Revenue $437.3 FY’16 Total Revenue (Pro Forma) 7% 70% 30% 8% 15% 45% 55% United States Europe Enterprise Service Provider Asi
Slide 13: A Strong Financial Position
A Strong Financial Position $ in millions Financial Profile Free Cash Flow FY '16 TARGET Q4 FY '16 FY'16* Operating Cash Flow $38.7 $95.3 Cash & Securities* $352.1 not to exceed $500 Purchase of Fixed Assets & Liquidity 3.0 2x - 3x EBITDA (15.1) (30.4) Intangible Assets Gross leverage 1.1 1x - 2x EB
Slide 14: Cumulative Free Cash Flow Generation
Cumulative Free Cash Flow Generation $ in millions $496 $500 $431 $337 $250 $240 $157 $100 $40 $- FY '10 FY '11 FY '12 FY '13 FY '14 FY '15 FY '16 FY’17 Capital Deployment Priorities: Product Development and Share Repurchase ©2016 NetScout Systems, Inc. 14 May 2016
Slide 15: Summary
Summary • A market and technology leader focused on helping customers tackle next-generation technology challenges • A new product cycle and new go-to-market initiatives aimed at reaccelerating top-line growth • Focused on driving notable improvement in profitability on relatively modest revenue gro
Slide 16: Thank You Questions?
Thank You Questions?
Slide 17: NetScout's Stages of Growth
NetScout’s 5 Stages of Growth Next 5 yrs. 2006-2015 $450-$2B GAAP to Non-GAAP Reconciliations NetScout 4.0 2001-2006 $100-$450M Pervasive NetScout 3.0 1991-2001 $1-$100M Leap Frog Mainstream NetScout 2.0 1984-1991 $1-$100M Service Survival NetScout 1.0 Provider $0-$1M Enterprise Invention NetScout 0
Slide 18: FY 2017 Guidance – GAAP Reconciliation: Net Income
FY 2017 Guidance – GAAP Reconciliation: Net Income For fiscal year 2017, the non-GAAP net income per diluted share expectation excludes the estimated amortization of acquired intangible assets of approximately $120 million, forecasted share-based compensation expenses of approximately $32 million, a
Slide 19: Reported GAAP to Non-GAAP Reconciliations
Reported GAAP to Non-GAAP Reconciliations (in millions except EPS) NetScout Systems, Inc. NetScout Systems, Inc. Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures - Continued Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures (In t
Slide 20: GAAP Reconciliation: FY'15 and FY'16 Pro Forma Operating Performance
GAAP Reconciliation: FY’15 and FY’16 Pro Forma Operating Performance FY 15 FY 15 FY 15 Q1FY16 Q1FY16 Q1FY16 7/1-7/14 Q2FY16 Q2FY16 Q3FY16 Q4FY16 FY 16 (In thousands) x-DHR NTCT Proforma x-DHR NTCT Proforma x-DHR Stub Reported Proforma Reported Reported Proforma Revenue: Product $ 486.6 $ 272.9 $ 759
Slide 21: GAAP Reconciliation: Trailing 8 quarter revenue detail
GAAP Reconciliation: Trailing 8 quarter revenue detail NetScout Systems, Inc. GAAP and Non-GAAP Pro Forma Historical Revenue (In millions, unaudited) Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 FY 2015 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 FY 2016 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 12/31/201
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