WESTFORD, Mass.--(BUSINESS WIRE)-- NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT), a leading provider of cybersecurity, service assurance, and business analytics solutions, today announced financial results for its second quarter fiscal year 2022 ended September 30, 2021.
“We are pleased with our second quarter results, which have contributed to our solid foundation as we move into the second half of the fiscal year,” stated Anil Singhal, NETSCOUT’s president and chief executive officer. “The strong growth of our ‘software-only’ product revenue in the second quarter supported our overall revenue increase, enhanced our margins, and improved our diluted earnings per share on a year-over-year basis. Additionally, as customers dealt with the challenging supply chain environment and experienced procurement issues, our ‘software-only’ solutions enabled them to utilize their budgets more effectively by accelerating the timing of their purchases with us.”
Singhal continued, “As ‘Guardians of the Connected World,’ our solutions continue to be vital. We provide borderless visibility and cybersecurity solutions that assure and secure the performance, availability, and security of our customers’ digital ecosystems. Our customers can leverage these solutions to compete more efficiently and effectively in the new economy, which is increasingly essential given the most-recent challenges brought about by the COVID-19 pandemic. Looking ahead, long-term technology trends, including 5G, digital transformation through cloud migration, and the requirement for greater cybersecurity protection, are all setting the stage for NETSCOUT’s continued advancement.”
Recent developments and highlights:
Q2 FY22 Financial Results
Total revenue (GAAP and non-GAAP) for the second quarter of fiscal year 2022 was $211.9 million, compared with $205.3 million in the same quarter one year ago. A reconciliation of GAAP and non-GAAP results is included in the attached financial tables.
Product revenue (GAAP and non-GAAP) for the second quarter of fiscal year 2022 was $101.6 million, which was approximately 48% of total revenue. This compares with second-quarter fiscal year 2021 product revenue (GAAP and non-GAAP) of $92.0 million, which was approximately 45% of total revenue.
Service revenue (GAAP and non-GAAP) for the second quarter of fiscal year 2022 was $110.3 million, or approximately 52% of total revenue, compared to service revenue (GAAP and non-GAAP) of $113.4 million, or approximately 55% of total revenue, for the same period one year ago.
NETSCOUT’s income from operations (GAAP) was $12.2 million in the second quarter of fiscal year 2022, compared with income from operations (GAAP) of $3.8 million in the comparable quarter one year ago. Second-quarter fiscal year 2022 non-GAAP EBITDA from operations was $53.0 million, or 25.0% of non-GAAP quarterly revenue, compared with $46.8 million of non-GAAP EBITDA from operations, or 22.8% of non-GAAP quarterly revenue in the second quarter of fiscal year 2021. The Company’s second-quarter fiscal year 2022 (GAAP) operating margin was 5.7% versus 1.8% in the prior fiscal year’s second quarter. Second-quarter fiscal year 2022 non-GAAP income from operations was $47.3 million with a non-GAAP operating margin of 22.3%. This compares with non-GAAP income from operations of $39.8 million and a non-GAAP operating margin of 19.4% in the second-quarter fiscal year 2021.
Net income (GAAP) for the second quarter of fiscal year 2022 was $7.9 million, or $0.11 per share (diluted), versus a net loss (GAAP) of $3.7 million, or $0.05 per share, for the second quarter of fiscal year 2021. On a non-GAAP basis, net income for the second quarter of fiscal year 2022 was $35.3 million, or $0.47 per share (diluted), compared with $28.2 million, or $0.38 per share (diluted), for the second quarter of fiscal year 2021.
As of September 30, 2021, cash, cash equivalents, and short and long-term marketable securities were $475.8 million, compared with $476.5 million as of March 31, 2021, and $427.8 million as of September 30, 2020. During the second quarter of fiscal year 2022, NETSCOUT repurchased a total of 921,299 shares of its common stock at an average price of $26.75 per share for an approximate total of $24.6 million spent in aggregate. At the end of the second quarter of fiscal year 2022, NETSCOUT had $350.0 million outstanding on its $800 million revolving credit facility, which will expire in July 2026.
First-Half FY22 Financial Results
Outlook:
NETSCOUT is reiterating its revenue and diluted net income per share outlook (GAAP and non-GAAP) previously issued on July 29, 2021. The current outlook is as follows:
Conference Call Instructions:
NETSCOUT will host a conference call to discuss its second-quarter fiscal year 2022 financial results today at 8:30 a.m. ET. This call will be webcast live through NETSCOUT’s website at https://ir.netscout.com/investors/overview/default.aspx. Alternatively, people can listen to the call by dialing (785) 424-1667. The conference call ID is NTCTQ222. A replay of the call will be available after 12:00 p.m. ET on November 04, 2021, for approximately one week. The number for the replay is (800) 839-5128 for U.S./Canada and (402) 220-1504 for international callers.
Use of Non-GAAP Financial Information:
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 revenue, non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share (diluted) and non-GAAP earnings before interest and other expense, income taxes, depreciation, amortization, and (EBITDA) from operations. Non-GAAP revenue eliminates the GAAP effects of acquisitions by adding back revenue related to deferred revenue revaluation. Non-GAAP gross profit includes the aforementioned revenue adjustments and also removes expenses related to the amortization of acquired intangible assets, share based compensation, and acquisition-related depreciation. Non-GAAP income from operations includes the aforementioned adjustments and also removes business development and integration expense, compensation for post-combination services, legal expenses related to a civil judgment, restructuring charges, and transitional service agreement expenses. Non-GAAP net income includes the foregoing adjustments related to non-GAAP income from operations, and also removes loss on extinguishment of debt, net of related income tax effects. Non-GAAP EBITDA from operations includes the aforementioned items related to non-GAAP income from operations and also removes non-acquisition related depreciation expense. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures included in the attached tables within this press release.
These non-GAAP measures are not in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (revenue, gross profit, operating margin, net income, and diluted net income per share), and may have limitations because they do not reflect all NETSCOUT’s results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate NETSCOUT’s results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP.
NETSCOUT believes these non-GAAP financial measures will enhance the reader’s overall understanding of NETSCOUT’s current financial performance and NETSCOUT's prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how the Company plans and measures its own business. NETSCOUT believes that providing these non-GAAP measures affords investors a view of NETSCOUT’s operating results that may be more easily compared to peer companies and also enables investors to consider NETSCOUT’s operating results on both a GAAP and non-GAAP basis during and following the integration period of NETSCOUT’s acquisitions. Presenting the GAAP measures on their own, without the supplemental non-GAAP disclosures, might not be indicative of NETSCOUT’s core operating results. Furthermore, NETSCOUT believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures provides useful information to management and investors regarding present and future business trends relating to its financial condition and results of operations.
NETSCOUT management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions. These non-GAAP measures are among the primary factors that management uses in planning and forecasting.
About NETSCOUT SYSTEMS, INC.
NETSCOUT SYSTEMS, INC. (NASDAQ: NTCT) assures digital business services against disruptions in availability, performance, and security. Our market and technology leadership stems from combining our patented smart data technology with smart analytics. We provide real-time, pervasive visibility, and insights customers need to accelerate and secure their digital transformation. Our approach transforms the way organizations plan, deliver, integrate, test, and deploy services and applications. Our nGenius service assurance solutions provide real-time, contextual analysis of service, network, and application performance. Arbor security solutions protect against DDoS attacks that threaten availability and advanced threats that infiltrate networks to steal critical business assets. To learn more about improving service, network, and application performance in physical or virtual data centers, or in the cloud, and how NETSCOUT’s performance and security solutions, powered by service intelligence can help you move forward with confidence, visit www.netscout.com or follow @NETSCOUT and @ArborNetworks on Twitter, Facebook, or LinkedIn.
Safe Harbor
Forward-looking statements in this release 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 this press release, which are not strictly historical statements, including without limitation, statements regarding NETSCOUT’s outlook, NETSCOUT being “Guardians of the Connected World,” and that NETSCOUT solutions continue to be vital, that NETSCOUT provides borderless visibility and cybersecurity solutions that assure and secure the performance, availability, and security of its customers’ digital ecosystems, that NETSCOUT customers can leverage these solutions to compete more efficiently and effectively in the new economy, which is increasingly essential given the most-recent challenges brought about by the COVID-19 pandemic, and that long-term technology trends, including 5G, digital transformation through cloud migration, and the requirement for greater cybersecurity protection, are all setting the stage for NETSCOUT’s continued advancement, constitute forward looking statements that involve risks and uncertainties. Actual results could differ materially from the forward-looking statements due to known and unknown risks, uncertainties, assumptions, and other factors. Such factors include COVID-19 related impacts, slowdowns or downturns in economic conditions generally and in the market for advanced network, service assurance and cybersecurity solutions specifically; the volatile foreign exchange environment; the Company’s relationships with strategic partners and resellers; dependence upon broad-based acceptance of the Company’s network performance management solutions; the presence of competitors with greater financial resources than the Company has, and their strategic response to the company’s products; the Company’s ability to retain key executives and employees; the Company’s ability to realize the anticipated savings from recent restructuring actions and other expense management programs; lower than expected demand for the Company’s products and services; and the timing and magnitude of stock buyback activity based on market conditions, corporate considerations, debt agreements, and regulatory requirements. For a more detailed description of the risk factors associated with the Company, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, and the Company’s subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission. NETSCOUT assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
©2021 NETSCOUT SYSTEMS, INC. All rights reserved. NETSCOUT and the NETSCOUT logo are registered trademarks or trademarks of NETSCOUT SYSTEMS, INC. and/or its subsidiaries and/or affiliates in the USA and/or other countries.
NETSCOUT SYSTEMS, INC.Condensed Consolidated Statements of Operations(In thousands, except per share data)(Unaudited) | ||||||||||||||||
Three Months EndedSeptember 30, | Six Months EndedSeptember 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue: | ||||||||||||||||
Product | $ | 101,619 |
| $ | 91,979 |
| $ | 183,569 |
| $ | 163,672 |
| ||||
Service |
| 110,299 |
|
| 113,360 |
|
| 218,621 |
|
| 225,482 |
| ||||
Total revenue |
| 211,918 |
|
| 205,339 |
|
| 402,190 |
|
| 389,154 |
| ||||
Cost of revenue: | ||||||||||||||||
Product |
| 20,340 |
|
| 26,977 |
|
| 43,505 |
|
| 48,129 |
| ||||
Service |
| 31,304 |
|
| 31,923 |
|
| 62,549 |
|
| 63,751 |
| ||||
Total cost of revenue |
| 51,644 |
|
| 58,900 |
|
| 106,054 |
|
| 111,880 |
| ||||
Gross profit |
| 160,274 |
|
| 146,439 |
|
| 296,136 |
|
| 277,274 |
| ||||
Operating expenses: | ||||||||||||||||
Research and development |
| 44,483 |
|
| 46,455 |
|
| 87,303 |
|
| 91,836 |
| ||||
Sales and marketing |
| 65,185 |
|
| 60,300 |
|
| 131,143 |
|
| 119,734 |
| ||||
General and administrative |
| 23,471 |
|
| 20,573 |
|
| 46,216 |
|
| 45,726 |
| ||||
Amortization of acquired intangible assets |
| 14,970 |
|
| 15,363 |
|
| 29,976 |
|
| 30,624 |
| ||||
Restructuring charges |
| - |
|
| (31 | ) |
| - |
|
| 62 |
| ||||
Total operating expenses |
| 148,109 |
|
| 142,660 |
|
| 294,638 |
|
| 287,982 |
| ||||
Income (loss) from operations |
| 12,165 |
|
| 3,779 |
|
| 1,498 |
|
| (10,708 | ) | ||||
Interest and other expense, net |
| (2,336 | ) |
| (3,394 | ) |
| (4,756 | ) |
| (8,174 | ) | ||||
Income (loss) before income tax expense |
| 9,829 |
|
| 385 |
|
| (3,258 | ) |
| (18,882 | ) | ||||
Income tax expense |
| 1,933 |
|
| 4,071 |
|
| 187 |
|
| 2,224 |
| ||||
Net income (loss) | $ | 7,896 |
| $ | (3,686 | ) | $ | (3,445 | ) | $ | (21,106 | ) | ||||
Basic net income (loss) per share | $ | 0.11 |
| $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.29 | ) | ||||
Diluted net income (loss) per share | $ | 0.11 |
| $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.29 | ) | ||||
Weighted average common shares outstanding used in computing: | ||||||||||||||||
Net income (loss) per share - basic |
| 74,382 |
|
| 73,058 |
|
| 74,122 |
|
| 72,682 |
| ||||
Net income (loss) per share - diluted |
| 75,093 |
|
| 73,058 |
|
| 74,122 |
|
| 72,682 |
|
NETSCOUT SYSTEMS, INC.Consolidated Balance Sheets(In thousands) | ||||
September 30,2021(Unaudited) | March 31,2021 | |||
Assets | ||||
Current assets: | ||||
Cash, cash equivalents and marketable securities | $ 475,817 | $ 476,453 | ||
Accounts receivable and unbilled costs, net | 162,888 | 197,717 | ||
Inventories | 25,728 | 22,813 | ||
Prepaid expenses and other current assets | 37,155 | 25,489 | ||
Total current assets | 701,588 | 722,472 | ||
Fixed assets, net | 45,008 | 48,474 | ||
Goodwill and intangible assets, net | 2,192,318 | 2,229,420 | ||
Operating lease right-of-use assets | 56,715 | 61,512 | ||
Other assets | 20,769 | 23,160 | ||
Total assets | $ 3,016,398 | $ 3,085,038 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 17,644 | $ 17,964 | ||
Accrued compensation | 57,783 | 83,057 | ||
Accrued other | 36,642 | 28,152 | ||
Current portion of operating lease liabilities | 11,992 | 12,354 | ||
Deferred revenue and customer deposits | 246,726 | 269,748 | ||
Total current liabilities | 370,787 | 411,275 | ||
Other long-term liabilities | 12,315 | 21,641 | ||
Deferred tax liability | 85,987 | 92,287 | ||
Accrued long-term retirement benefits | 39,704 | 39,479 | ||
Long-term deferred revenue | 102,457 | 103,310 | ||
Operating lease liabilities, net of current portion | 56,144 | 61,267 | ||
Long-term debt | 350,000 | 350,000 | ||
Total liabilities | 1,017,394 | 1,079,259 | ||
Stockholders' equity: | ||||
Common stock | 126 | 124 | ||
Additional paid-in capital | 2,991,704 | 2,955,400 | ||
Accumulated other comprehensive loss | (1,931) | (1,940) | ||
Treasury stock, at cost | (1,362,141) | (1,322,496) | ||
Retained earnings | 371,246 | 374,691 | ||
Total stockholders' equity | 1,999,004 | 2,005,779 | ||
Total liabilities and stockholders' equity | $ 3,016,398 | $ 3,085,038 |
NETSCOUT SYSTEMS, INC.Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures(In thousands, except per share data)(Unaudited) | ||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | Six Months Ended September 30, | ||||||||||||||||||
2021 | 2020 | 2021 | 2021 | 2020 | ||||||||||||||||
Revenue (GAAP) | $ | 211,918 |
| $ | 205,339 |
| $ | 190,272 |
| $ | 402,190 |
| $ | 389,154 |
| |||||
Service deferred revenue fair value adjustment |
| - |
|
| 1 |
|
| - |
|
| - |
|
| 3 |
| |||||
Non-GAAP Revenue | $ | 211,918 |
| $ | 205,340 |
| $ | 190,272 |
| $ | 402,190 |
| $ | 389,157 |
| |||||
Gross Profit (GAAP) | $ | 160,274 |
| $ | 146,439 |
| $ | 135,862 |
| $ | 296,136 |
| $ | 277,274 |
| |||||
Service deferred revenue fair value adjustment |
| - |
|
| 1 |
|
| - |
|
| - |
|
| 3 |
| |||||
Share-based compensation expense (1) |
| 2,228 |
|
| 2,154 |
|
| 1,887 |
|
| 4,115 |
|
| 3,749 |
| |||||
Amortization of acquired intangible assets (2) |
| 3,352 |
|
| 4,765 |
|
| 3,360 |
|
| 6,712 |
|
| 9,500 |
| |||||
Acquisition related depreciation expense (5) |
| 7 |
|
| 5 |
|
| 5 |
|
| 12 |
|
| 11 |
| |||||
Non-GAAP Gross Profit | $ | 165,861 |
| $ | 153,364 |
| $ | 141,114 |
| $ | 306,975 |
| $ | 290,537 |
| |||||
Income (Loss) from Operations (GAAP) | $ | 12,165 |
| $ | 3,779 |
| $ | (10,667 | ) | $ | 1,498 |
| $ | (10,708 | ) | |||||
Service deferred revenue fair value adjustment |
| - |
|
| 1 |
|
| - |
|
| - |
|
| 3 |
| |||||
Share-based compensation expense (1) |
| 16,735 |
|
| 15,736 |
|
| 13,965 |
|
| 30,700 |
|
| 27,832 |
| |||||
Amortization of acquired intangible assets (2) |
| 18,322 |
|
| 20,128 |
|
| 18,366 |
|
| 36,688 |
|
| 40,124 |
| |||||
Business development and integration expense (3) |
| - |
|
| - |
|
| (5 | ) |
| (5 | ) |
| 16 |
| |||||
Compensation for post-combination services (4) |
| - |
|
| 63 |
|
| 2 |
|
| 2 |
|
| 127 |
| |||||
Restructuring charges |
| - |
|
| (31 | ) |
| - |
|
| - |
|
| 62 |
| |||||
Acquisition related depreciation expense (5) |
| 64 |
|
| 60 |
|
| 60 |
|
| 124 |
|
| 121 |
| |||||
Transitional service agreement expense (6) |
| 59 |
|
| 101 |
|
| 58 |
|
| 117 |
|
| 101 |
| |||||
Legal judgments expense (8) |
| - |
|
| - |
|
| - |
|
| - |
|
| 2,804 |
| |||||
Non-GAAP Income from Operations | $ | 47,345 |
| $ | 39,837 |
| $ | 21,779 |
| $ | 69,124 |
| $ | 60,482 |
| |||||
Net Income (Loss) (GAAP) | $ | 7,896 |
| $ | (3,686 | ) | $ | (11,341 | ) | $ | (3,445 | ) | $ | (21,106 | ) | |||||
Service deferred revenue fair value adjustment |
| - |
|
| 1 |
|
| - |
|
| - |
|
| 3 |
| |||||
Share-based compensation expense (1) |
| 16,735 |
|
| 15,736 |
|
| 13,965 |
|
| 30,700 |
|
| 27,832 |
| |||||
Amortization of acquired intangible assets (2) |
| 18,322 |
|
| 20,128 |
|
| 18,366 |
|
| 36,688 |
|
| 40,124 |
| |||||
Business development and integration expense (3) |
| - |
|
| - |
|
| (5 | ) |
| (5 | ) |
| 16 |
| |||||
Compensation for post-combination services (4) |
| - |
|
| 63 |
|
| 2 |
|
| 2 |
|
| 127 |
| |||||
Restructuring charges |
| - |
|
| (31 | ) |
| - |
|
| - |
|
| 62 |
| |||||
Acquisition related depreciation expense (5) |
| 64 |
|
| 60 |
|
| 60 |
|
| 124 |
|
| 121 |
| |||||
Loss on extinguishment of debt (7) |
| 596 |
|
| - |
|
| - |
|
| 596 |
|
| - |
| |||||
Legal judgments expense (8) |
| - |
|
| - |
|
| - |
|
| - |
|
| 2,804 |
| |||||
Income tax adjustments (9) |
| (8,315 | ) |
| (4,027 | ) |
| (6,089 | ) |
| (14,404 | ) |
| (9,523 | ) | |||||
Non-GAAP Net Income | $ | 35,298 |
| $ | 28,244 |
| $ | 14,958 |
| $ | 50,256 |
| $ | 40,460 |
| |||||
Diluted Net Income (Loss) Per Share (GAAP) | $ | 0.11 |
| $ | (0.05 | ) | $ | (0.15 | ) | $ | (0.05 | ) | $ | (0.29 | ) | |||||
Share impact of non-GAAP adjustments identified above |
| 0.36 |
|
| 0.43 |
|
| 0.35 |
|
| 0.72 |
|
| 0.84 |
| |||||
Non-GAAP Diluted Net Income Per Share | $ | 0.47 |
| $ | 0.38 |
| $ | 0.20 |
| $ | 0.67 |
| $ | 0.55 |
| |||||
Shares used in computing non-GAAP diluted net income per share |
| 75,093 |
|
| 73,594 |
|
| 75,212 |
|
| 75,112 |
|
| 73,521 |
|
NETSCOUT SYSTEMS, INC.Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures - Continued(In thousands)(Unaudited) | |||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | Six Months Ended September 30, | |||||||||||||||||||||
|
|
|
| 2021 |
| 2020 |
| 2021 |
| 2021 |
| 2020 | |||||||||||
(1 | ) | Share-based compensation expense included in these amountsis as follows: | |||||||||||||||||||||
Cost of product revenue | $ | 321 |
| $ | 344 |
| $ | 274 |
| $ | 595 |
| $ | 589 |
| ||||||||
Cost of service revenue |
| 1,907 |
|
| 1,810 |
|
| 1,613 |
|
| 3,520 |
|
| 3,160 |
| ||||||||
Research and development |
| 4,902 |
|
| 4,935 |
|
| 4,091 |
|
| 8,993 |
|
| 8,716 |
| ||||||||
Sales and marketing |
| 5,842 |
|
| 5,357 |
|
| 4,814 |
|
| 10,656 |
|
| 9,349 |
| ||||||||
General and administrative |
| 3,763 |
|
| 3,290 |
|
| 3,173 |
|
| 6,936 |
|
| 6,018 |
| ||||||||
Total share-based compensation expense | $ | 16,735 |
| $ | 15,736 |
| $ | 13,965 |
| $ | 30,700 |
| $ | 27,832 |
| ||||||||
(2 | ) | Amortization expense related to acquired software and producttechnology, tradenames, customer relationships included in theseamounts is as follows: | |||||||||||||||||||||
Cost of product revenue | $ | 3,352 |
| $ | 4,765 |
| $ | 3,360 |
| $ | 6,712 |
| $ | 9,500 |
| ||||||||
Operating expenses |
| 14,970 |
|
| 15,363 |
|
| 15,006 |
|
| 29,976 |
|
| 30,624 |
| ||||||||
Total amortization expense | $ | 18,322 |
| $ | 20,128 |
| $ | 18,366 |
| $ | 36,688 |
| $ | 40,124 |
| ||||||||
(3 | ) | Business development and integration expense included inthese amounts is as follows: | |||||||||||||||||||||
General and administrative | $ | - |
| $ | - |
| $ | (5 | ) | $ | (5 | ) | $ | 16 |
| ||||||||
Total business development and integration expense | $ | - |
| $ | - |
| $ | (5 | ) | $ | (5 | ) | $ | 16 |
| ||||||||
(4 | ) | Compensation for post-combination services included in theseamounts is as follows: | |||||||||||||||||||||
Research and development | $ | - |
| $ | 62 |
| $ | 2 |
| $ | 2 |
| $ | 125 |
| ||||||||
Sales and marketing |
| - |
|
| 1 |
|
| - |
|
| - |
|
| 2 |
| ||||||||
Total compensation for post-combination services | $ | - |
| $ | 63 |
| $ | 2 |
| $ | 2 |
| $ | 127 |
| ||||||||
(5 | ) | Acquisition related depreciation expense included in theseamounts is as follows: | |||||||||||||||||||||
Cost of product revenue | $ | 4 |
| $ | 3 |
| $ | 3 |
| $ | 7 |
| $ | 7 |
| ||||||||
Cost of service revenue |
| 3 |
|
| 2 |
|
| 2 |
|
| 5 |
|
| 4 |
| ||||||||
Research and development |
| 45 |
|
| 42 |
|
| 42 |
|
| 87 |
|
| 84 |
| ||||||||
Sales and marketing |
| 8 |
|
| 9 |
|
| 9 |
|
| 17 |
|
| 18 |
| ||||||||
General and administrative |
| 4 |
|
| 4 |
|
| 4 |
|
| 8 |
|
| 8 |
| ||||||||
Total acquisition related depreciation expense | $ | 64 |
| $ | 60 |
| $ | 60 |
| $ | 124 |
| $ | 121 |
| ||||||||
(6 | ) | Transitional service agreement (income) expense included inthese amounts is as follows: | |||||||||||||||||||||
Research and development | $ | 7 |
| $ | 11 |
| $ | 6 |
| $ | 13 |
| $ | 11 |
| ||||||||
Sales and marketing |
| 9 |
|
| 16 |
|
| 10 |
|
| 19 |
|
| 16 |
| ||||||||
General and administrative |
| 43 |
|
| 74 |
|
| 42 |
|
| 85 |
|
| 74 |
| ||||||||
Other (income) expense, net |
| (59 | ) |
| (101 | ) |
| (58 | ) |
| (117 | ) |
| (101 | ) | ||||||||
Total transitional service agreement (income) expense | $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| ||||||||
(7 | ) | Loss on extinguishment of debt included in this amount isas follows: | |||||||||||||||||||||
Interest and other expense, net | $ | 596 |
| $ | - |
| $ | - |
| $ | 596 |
| $ | - |
| ||||||||
Total loss on extinguishment of debt | $ | 596 |
| $ | - |
| $ | - |
| $ | 596 |
| $ | - |
| ||||||||
(8 | ) | Legal judgments expense included in this amount isas follows: | |||||||||||||||||||||
General and administrative | $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | 2,804 |
| ||||||||
Total legal judgments expense | $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | 2,804 |
| ||||||||
(9 | ) | Total income tax adjustment included in thisamount is as follows: | |||||||||||||||||||||
Tax effect of non-GAAP adjustments above | $ | (8,315 | ) | $ | (4,027 | ) | $ | (6,089 | ) | $ | (14,404 | ) | $ | (9,523 | ) | ||||||||
Total income tax adjustments | $ | (8,315 | ) | $ | (4,027 | ) | $ | (6,089 | ) | $ | (14,404 | ) | $ | (9,523 | ) |
NETSCOUT SYSTEMS, INC.Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial Measures -Non-GAAP EBITDA from Operations(In thousands)(Unaudited) | |||||||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | Six Months Ended September 30, | |||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2021 |
| 2020 | |||||||
Income (loss) from operations (GAAP) | $ | 12,165 | $ | 3,779 | $ | (10,667 | ) | $ | 1,498 | $ | (10,708 | ) | |||||
Previous adjustments to determine non-GAAP income from operations |
| 35,180 |
| 36,058 |
| 32,446 |
|
| 67,626 |
| 71,190 |
| |||||
Non-GAAP Income from operations |
| 47,345 |
| 39,837 |
| 21,779 |
|
| 69,124 |
| 60,482 |
| |||||
Depreciation excluding acquisition related |
| 5,623 |
| 6,955 |
| 5,811 |
|
| 11,434 |
| 12,907 |
| |||||
Non-GAAP EBITDA from operations | $ | 52,968 | $ | 46,792 | $ | 27,590 |
| $ | 80,558 | $ | 73,389 |
|
NETSCOUT SYSTEMS, INC.Reconciliation of GAAP Financial Guidance to Non-GAAP Financial Guidance (Unaudited) (In millions, except net income per share - diluted) | ||||||
| ||||||
FY'21 | FY'22 | |||||
GAAP & Non-GAAP revenue | $ | 831.3 |
| ~$835 million to ~$865 million | ||
| ||||||
FY'21 | FY'22 | |||||
GAAP net income | $ | 19.4 |
| ~$27 million to ~$32 million | ||
Deferred service revenue fair value adjustment | $ | - |
| - | ||
Amortization of intangible assets | $ | 80.2 |
| ~$73 million to ~$74 million | ||
Share-based compensation expenses | $ | 51.9 |
| ~$53 million to ~$54 million | ||
Business development & integration expenses* | $ | 0.5 |
| Less than $1 million | ||
Interest Exp - Loss on Debt Extinguishment | $ | - |
| Less than $1 million | ||
Legal judgments expense | $ | 2.8 |
| - | ||
Restructuring costs | $ | 0.1 |
| - | ||
Total adjustments | $ | 135.5 |
| ~$128 million to ~$129 million | ||
Related impact of adjustments on income tax | $ | (29.0 | ) | (~$27 million) | ||
Non-GAAP net income | $ | 125.8 |
| ~$128 million to ~$133 million | ||
| ||||||
GAAP net income per share (diluted) | $ | 0.26 |
| ~$0.36 to ~$0.42 | ||
Non-GAAP net income per share (diluted) | $ | 1.70 |
| ~$1.71 to ~$1.77 | ||
| ||||||
Average weighted shares outstanding (diluted GAAP) |
| 73.8 |
| ~75 million | ||
Average weighted shares outstanding (diluted Non-GAAP) |
| 73.8 |
| ~75 million | ||
*Business development & integration expenses include compensation for post-combination services and acquisition-related depreciation expense **Figures in table may not total due to rounding |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005227/en/
Investors Anthony Piazza Vice President, Corporate Finance 978-614-4286 IR@netscout.com
Media Maribel Lopez Manager, Marketing & Corporate Communications 781-362-4330 Maribel.Lopez@netscout.com
Source: NETSCOUT SYSTEMS, INC.