NetScout Systems products ride out on computer networks looking for trouble. The company’s monitoring appliances, placed throughout a network, allow administrators to collect information about traffic flow and to optimize application and network performance. NetScout’s nGenius Service Assurance Solution monitors systems ranging from VoIP communications to customer relationship management applications. NetScout sells directly and through resellers and distributors to corporate and government customers. The US supplies about 60% of revenue.
Products generate more than half of NetScout's sales with the rest coming from services. The Adaptive Service Intelligence (ASI) technology is the foundation of its flagship nGenius product. ASI converts network traffic data into "smart data" that companies can use for analysis.
The company procures parts from contractors and does the assembly and testing of products itself.
NetScout Systems is headquartered in Westford, Massachusetts. It has offices in several US states and some two dozen countries throughout the world.
NetScout gets about 60% of revenue from the US, about 20% from Europe, and about 10% from Asia.
Sales and Marketing
NetScout sells through its own sales force and indirect channels. Its markets are enterprises, telecommunications service providers, and government agencies. No customer, direct or indirect, accounts for more than 10% of sales, although Verizon did in the past.
In its 2016 and 2017 fiscal years (ended March), NetScout’s revenue jumped to a high of $1.2 billion following its acquisition of Danaher’s communications business. However, NetScout’s revenue slipped 15% in 2018 to $987 million from 2017. Product sales fell 26% in 2018 from 2017 because of lower revenue from a large tier-one service provider and lower-than expected orders for service assurance and DDoS offerings. Service revenue rose 3% because of an increase in maintenance contracts.
Net income rose to about $80 million in 2018 compared to $33 million in 2017, boosted by a $98 million tax benefit. NetScout had a loss of about $19 million before taxes in 2018 compared to income of $52 million before tax.
NetScout had about $448 million of cash, cash equivalents, and marketable securities at the end of 2018, down about $17 million from 2017. During the year, it spent more than $500 million to repurchase shares, about $16 million for capital expenditures, and about $8 million for the acquisition of Efflux.
The increasing amounts of data that flow through networks are right up NetScout’s alley. The company offers products and services that can corral data and help make sense of it. It further develops its products to help IT organizations sort through complex service delivery, datacenter consolidation, branch office consolidation, and optimization to move applications to private and public clouds.
The acquisition of the communications of Danaher several years ago significantly expanded NetScout’s direct sales force with sales people who have expertise in targeting the enterprise, service provider, and government markets. NetScout intends to leverage that sales force to increase its presence in the enterprise and service provider markets.
NetScout found itself the victim of a reduction in spending by a large telecom provider as well as overall slowdown in telecom spending. Enterprise customers, especially federal agency customers, had delayed funding, extending sales cycles and softening demand for some product lines.
Mergers and Acquisitions
In 2017 NetScout acquired Efflux for $8.6 million. Efflux’s technology detects, analyzes, and correlates threat activity within enterprise networks.
In 2016 NetScout bought Avvasi for $4.6 million. Avvasi’s technology allows service providers to measure, improve, and monetize video in networks.
178 E TASMAN DR
San Jose, CA 95134-1619
Phone: 1 (408) 585-6800
Employer Type: Privately Owned
Network Security: Natasha Belaya
Regional Sales Manager: Gary Strom
Employees (This Location): 160
Employees (All Locations): 160
San Jose, CA