Post on 15-Mar-2020
1 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Systems Corporate Overview
Jean Bua
Chief Financial Officer
May 2013
2 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Safe Harbor Statement
Certain matters being discussed by NetScout’s manage ment today include forward-looking statements which are made pursuant to the Safe Harbor provisions of section 21-E of the Securities Exchange Act of 1 934. Stockholders are cautioned that statements which are not strictly historical s tatements, including statements concerning future expected financial performance, m anagement objectives and plans for future operations, our relationships with strategic partners, the release date of new products or enhancements to existing pr oducts, growth and trends in the market for network and application performance management and market acceptance of our products, constitute forward-look ing statements.
The forward-looking statements include, but are not limited to, any statements containing the words “expect,” “anticipa te,” “estimates,” “believes,” “may,” “will,” “should” and similar expressions and the negatives thereof. These forward-looking statements involve a number of risk s and uncertainties that could cause actual results to differ materially from the forward-looking statements. Those risks and uncertainties are detailed in the company 's filings from time to time with the Securities and Exchange Commission. The inform ation in the forward-looking statements is provided as of the date of such oral statements and the company disclaims any obligation to update such statements.
3 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Foundation (Nasdaq: NTCT)• Over 25 years of evolution and leadership
within the industry focused on…
• Core, patented technologies enabling the most powerful information capture and pro-active workflows
• Fortune 1000 customer base that operate with complex network environments
• International footprint with sales, support, and services in over 30 countries
• Market leader in assuring delivery of services across IP-based networks
• FY ’13: $352M revenue; $1.32 EPS; (non-GAAP)
Industry vision and strategy: Unified Service Delivery Management (USDM)
4 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout: What We Have Achieved…
1993 - 20092009 to Present
Leverage packet analysis and network performance knowledge to become the Enterprise NPM market
leader
Leverage Enterprise success to enter the large
and complex Service Provider market to become
IP Probe market leader
Brand recognition and market leadership in our target markets!
5 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Market Leader in our Targeted Markets
“NetScout is expected to continue dominating the total market throughout
the forecast period with a market share of 30.8 percent in 2010.”
Source: Analysys Mason, March 2012
Service Provider IP Probe MarketEnterprise/NPM Market
Global network performance monitoring and management solutions for distributed environments
(market share by revenue)
Source: Frost & Sullivan
“NetScout has achieved a market leading position in the IP probe market”
IP Probe systems market shares by revenue, Total revenue USD $367M
30.8%
13.2%
12.1%
10.9%8.6%
6.2%5.1%
3.3%
9.8%
NetScout
IBM
Hewlett Packard
CA
Fluke Networks
Solar Winds
Network Instruments
Alcatel Lucent
Others
28.0%
25.0%
13.0% 34.0%
NetScout
Tektronics
JDS Uniphase
Other
6 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout: Next Growth Stage
1993 - 20092009 to Present Present to 2016
Enterprise NPM market leader
IP Probe market leader
Leverage knowledge from Service Provider success to progress into a connected product solution enabling
Business Intelligence
7 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Tier 3: nGenius Analytics Apps
nGenius Apps delivered on Thin Client WebSDM, Experience Monitor, NewsStandsPacket Analysis, Configuration Manager
NetScout: Our Product and Solution
Tier 2: nGenius Middleware
nGenius Middleware, Correlation & Analytics Provisioning and Mediation Server
Tier 3: nGenius Analytics Apps
nGenius Apps delivered on Thin Client WebSDM, Experience Monitor, NewsStandsPacket Analysis, Configuration Manager
Tier 1: nGenius Data Sources
Packet collection & ASI meta data creationnGenius InfiniStream with ASI Adaptors (Infinistream/PFS)
NGenius: Service Assurance
8 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Trends We See Driving IT Operations
Challenges Impact
Convergence of services Resource contention
Collaboration within IT silos Common means of communicating
Consistency of performance Deviation from the norm
Exploding traffic volumes Lack of visibility into delays
Distributed organization Cyber attacks
Aging Infrastructure Change management
Current available approaches aren’t addressing cust omer issues ...
9 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Current Approaches Result in…
Various Data Collection Appliances
No Unified PerspectiveDisparate and disconnected toolsMultiple and limited data sources
Syslog UC Active
Agents
Java / .netMonitoring
NetFlow
Past practice has only made a tactical use of packe t analysis, intelligence and DPI … including NetScout product solutions
10 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Network Team Application Team Voice/Video Team Security Team
Unified Services Dashboard
NetworkPerformance
ApplicationPerformance
Voice/VideoPerformance
Cyber SecurityIncident
Response
Analytics Applications
NetScout Approach
NetScout connects IT organizations through our USDM s trategy and patent pending ASI software technology
11 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Approach Competitors Approach
Highest value source: Packet derived
Predictive/Proactive: IT monitoring
Various components in an environment
Reactive: user call into IT
Service Model by application/service Model for individual application problem
Communities of users Single user
Automated analytics for use by multiple IT operations groups
Manual analytics used by individual IT groups
Unified Service Delivery Management Strategy
Leveraging “modern workflow” vision from Service Pr ovider markets enables connected NetScout approach
12 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Product Differentiator: ASI
Live PacketStream
ASI Meta Data
Monitoring Network(Traditional Architecture)
Monitoring Services(Next Generation Architecture)10-100 times data reduction
Storage capacity:32 TB -- 320 TB1 day -- 1 week
ASI technology transforms network transactions (pac ket flows) into structured data enabling a more leveraged monitoring of network ser vices and applications
13 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Beyond 2013: Business Intelligence for “Big Data”
ASI
nGenius SA, BI, OI, CI
Packet Flow Switch
Network
Analytics & Reporting
IntelligenceExtraction & Analysis
AdaptiveTraffic Conditioning
InfiniStream
ASI technology provides the platform for Business I ntelligence analytics for “Big Data” uses
14 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Business Model
• Sales, support and services in 32+ countries
• Dedicated sales for major markets
• Global centers of R&D excellence
• Pricing models: simple and easy
• Gross margins similar to software industry
• Fortune 1000 customer base
• Strong cash flow generation
• Minimal capital expenditure requirements
Prior investment in infrastructure creates a scalab le organization poised for the next growth stage
15 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
$262$290
$309
$352
$0.86
$1.04$1.10
$1.32
FY '10 FY '11 FY '12 FY '13 FY '14Guidance
Non-GAAP$385 - $400
10 – 14% Growth
$1.40 - $1.506 – 14% Growth
Revenue and EPS Performance Overview
Accelerating revenue and EPS growthGuidance as of April 25, 2013
16 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Investment Position:
Balance Sheet Highlights (in millions)
Total liquidity at 3/31/13 exceeds $404M
FY ’13 FY ’12 FY ’11 FY ’10
Cash and Securities $154 $214 $229 $170
Accounts Receivable $74 $70 $63 $66
Total Debt $0 $62 $68 $79
Total Deferred Revenue $121 $112 $100 $102
Total Stockholders’ Equity $372 $342 $320 $267
Free Cash Flow $83 $57 $60 $40
17 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Free Cash Flow Generation (in millions)
$-
$50
$100
$150
$200
$250
$300
FY '10 FY '11 FY '12 FY '13
FY '13 FCFFY '12 FCFFY '11 FCFFY '10 FCF
$40
$100
$157
$240
Significant cash generation
18 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
NetScout Operating Targets (non-GAAP)
Operating
Targets
FY ’14 Guidance
(as of 4/25/13)
Revenue Growth Mid-teens 10 – 14%
Gross Margin 78 – 81% 79 – 80%
R&D of Revenue 13 – 15% 15 – 16%
S&M of Revenue 33 – 35% 33 – 34%
G&A of Revenue 6 – 8% 6 – 7%
Operating Margin 24 – 27% 25 – 26%
Increasing operating leverage through revenue growt h
Growth drivers:� Service Provider:
• Global deployments of LTE• Consumer adoption of LTE• Increasing LTE services• Cable/MSO capture of mobile users• Integrated voice/data functionality• Further to the RAN…
� Enterprise:• USDM strategy• NPM + APM functionality• Aging infrastructure
� Business Intelligence
19 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Summary
� Stable, experienced management & workforce
� Industry vision and strategy: Unified Service Delivery Management (USDM)
� Core focus on IP networks and performance with industry transforming technology (ASI)
� Brand recognition and market leadership in all targeted markets
� Scalable infrastructure requiring limited future investment
� Solid cash flow and investment position for continuing growth and business development
� Accelerating revenue growth producing increased operating margins
20 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
Non-GAAP Measure Reconciliation
Please see the press release on our website for a reconciliation of GAAP to non-GAAP information
www.NetScout.com/investor
21 NetScout Systems Overview | May 2013 | © 1992-2013 NetScout Systems, Inc. All rights reserved.
www.NetScout.com