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NetScout Systems, Inc. (NTCT) — this company's answers

The model's full reasoning — Q2 2017 call → NOThe question asks about a recently emerged positive element of the business that analysts probe, and whether management responds with unhesitating, granular operational command. Looking at the transcript, the key recently emerged element is the InfiniStreamNG platform, which was announced as generally available in the last month (per the call). Analysts ask about: 1. Alex Kurtz asks about the competitive landscape and deal flow - management responds about market conditions, not specifically about InfiniStreamNG. 2. Chad Bennett asks about the service provider pipeline changing from traditional appliance-based solutions to software-only probes over the last six months. Anil responds: "pipeline is still building, as you probably know that we are announced the software-based solution only last month. We made announcement of the availability, in fact probably this month, and so the pipeline I think is going to more gravitate towards the software solution over the next year, but this year we don't see the impact - much impact. Bulk of the pipeline is still traditional product and some of the pipeline which actually will result in product sales next year is actually moving towards the soft software side." This is a response to a question about the software-only solution (InfiniStreamNG software). The response is somewhat general - it talks about pipeline building but doesn't provide granular operational detail about how it's being delivered, priced, staffed, etc. It's more of a general statement about pipeline direction. 3. Matt Hedberg asks about software-only solutions pricing: "any sort of anecdotal thoughts on how the pricing is going to line up? In other words, do you think you're able to potentially offset potentially lower software prices with higher volume? Potentially better gross margins? Just any other color on sort of how you are kind of thinking about a more software rich product cycle." Anil responds: "so overall when you look over the next 3, 4 years a long-term variance, I think majority of the product will move to the software area and we already enjoy it prior to the acquisition, very high gross margins of 80% less and I think this will become even higher.

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