Gigamon 1Q15 Investor Relations Presentation

Gigamon (GIMO) Investor OverviewAs of January 29, 2015

2©2015 Gigamon Inc. All rights reserved.

Safe Harbor StatementAny forward-looking indication of plans for products is preliminary and all future release dates are tentative and subject to change.

Any future release of products or planned modifications to product capability, functionality, or features are subject to ongoing evaluation by Gigamon, and may or may not

be implemented and should not be considered firm commitments by Gigamon and should not be relied upon in making purchasing decisions.

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of

1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking

statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes,"

"estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or

intentions. Forward-looking statements in this presentation include, but are not limited to, our expectations that the market for our products will continue to grow and

develop; and our expectations regarding product developments and enhancements and adoption of those products by our customers. Our expectations and beliefs

regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from

those projected. These risks include our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase

of our existing products and new products; our ability to retain existing customers and generate new customers; the market for network traffic visibility solutions not

continuing to develop; competition from other products and services; and general market, political, economic and business conditions.

The forward-looking statements contained in this presentation are also subject to other risks and uncertainties, including those more fully described in our filings with the

Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 28, 2013 and our Quarterly Report on Form 10-Q for the

most recent quarterly period. The forward-looking statements in this presentation are based on information available to Gigamon as of the date hereof, and Gigamon

disclaims any obligation to update any forward-looking statements, except as required by law.

This presentation includes certain non-GAAP financial measures as defined by the SEC. As required by Regulation G, we have provided a reconciliation of those measures

to the most directly comparable GAAP measures, which is available in the appendix.


• Enabling disruptive network change

• Broad software-centric solution

• Industry leading capabilities

• Large underpenetrated market

• Compelling business model

Investment Highlights

$46

$68

$97

$140

$157

2010 2011 2012 2013 20142010 2011 2012 2013 2014

Revenue($ Millions)


Powerful Market Drivers in IT

Visible traffic

Agile networks

Improved ROI

Centralized management

Reduced complexity


Third Party Applications,

SDN Controller Integration, etc…

Applications & Tools Infrastructure,

User Community

* APIs, GigaVUE-OS on white box subject to future availability

Unified Visibility Fabric™

Traffic

Intelligence

Visibility

Fabric Nodes(Pervasive visibility across

physical, virtual, remote

sites, and future SDN

production networks)

Fabric

Services Flow Mapping®

Fabric Control

(Management)

Applications

Inline Bypass

GigaVUE-HD8 GigaVUE-HD4 GigaVUE-HB1

GigaVUE-HC2H S

eri

es

TA

Se

rie

s

GigaVUE-TA1

GigaVUE-OS

on white box* Vir

tua

l V

isib

ilit

y

GigaVUE-VM

TA

Ps

G-TAP

G-TAP A Series

G-TAP BiDi

Embedded TAPs

G S

eri

es GigaVUE-2404

GigaVUE-420

G-SECURE-0216

De-duplication

Packet Slicing

FlowVUE™

Masking

GTP Correlation

Header Stripping

NetFlow Generation

Tunneling

SSL Decryption

Adaptive Packet Filtering

GigaVUE-FM

Clustering

AP

I

AP

I

AP

I

AP

I

AP

I


AS OF Q4 2014

Enterprise

A broad spectrum of brand-name customers

Gigamon Customers Today

TECHNOLOGY INDUSTRIAL RETAIL

FINANCE HEALTHCARE & INSURANCE GOVERNMENT

50 of the Top 100 Global SPs

Service Providers

1600+ End Customers 65+ of the Fortune-100

http://www.3m.com/

http://www.3m.com/

http://www.bjc.org/

http://www.bjc.org/


58X as of Q4 2014 - Top 25 Gigamon customers at the time of IPO (June 2013)

Seed and Grow2006 2007 2008 2009 2010 2011 2012 2013 2014

Top 25 Customers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1 Service Provider

2 Enterprise

3 Service Provider

4 Enterprise

5 Enterprise

6 Service Provider

7 Service Provider

8 Service Provider

9 Enterprise

10 Service Provider

11 Service Provider

12 Enterprise

13 Enterprise

14 Enterprise

15 Enterprise

16 Service Provider

17 Service Provider

18 Service Provider

19 Enterprise

20 Enterprise

21 Enterprise

22 Enterprise

23 Service Provider

24 Enterprise

25 Service Provider

= Initial purchase


Our Market and TAM: Into the Future

Visibility Fabric™

$2-3bn

The Network

Upgrade Cycle

3G 4G

LTE / VoLTE

Applications Designed

for the Cloud

Internet

of Things


Growth Enablers

The power of our

SOLUTIONThe strength of our

POSITION

Our unrealized

POTENTIAL

The market

DEMAND

The VALUEwe deliver$

Financial Overview


Compelling Financial Performance

$16 $19

$24

$18

$23

$29 $32

$20 $23

$26

$37

$6

$7

$8

$8

$9

$10

$11

$12 $12

$13

$14

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

= Product = Service

Quarterly Revenue($ Millions)

Geography (% revenue)

End-Customer Vertical (% bookings)

APAC…

EMEA

17%

AMERICAS

78%

SERVICE …

GOVERNME…

ENTERPRISE

73%


14% 15% 16%

2%

15%

23%

20%

-10%

-5%

5%

17%

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Note: See appendix for reconciliation of non-GAAP operating expenses and non-GAAP operating margin.

Investing for Profitable Growth

Non-GAAP Operating Expenses($ Millions)

$4 $4 $5 $5 $6 $6 $8 $8 $9 $9 $9

$9$9

$12 $12$13 $13

$15 $15$17 $17 $18

$2$3

$3 $3$3 $3

$3 $4

$3 $3$3

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

R&D S&M G&A

Non-GAAP Operating Margin


Long-Term Target Model (Non-GAAP)

2013 2014 Q4’14 Target Model

Gross Margin 81% 77% 77% 75 – 77%

R&D 18% 22% 17% 15 – 16%

S&M 38% 43% 36% 29 – 31%

G&A 9% 9% 7% 5%

Operating Margin 16% 4% 17% 23 – 28%

Thank You


Non-GAAP Reconciliation Q212 - 2013 ($ Millions)Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 2013

Revenue $22.5 $25.7 $31.9 $25.8 $ 32.4 $39.0 $43.1 $140.3

GAAP gross profit $17.9 $20.6 $25.0 $20.4 $ 23.6 $31.2 $34.3 $109.5

Share-based compensation expense and related taxes 0.0 0.1 0.0 0.0 3.0 0.3 0.4 3.8

Non-GAAP gross profit $17.9 $20.7 $25.1 $20.5 $ 26.6 $31.5 $34.7 $113.3

% non-GAAP gross margin 80% 81% 79% 79% 82% 81% 81% 81%

GAAP research and development $ 3.6 $ 4.8 $ 5.4 $ 5.7 $ 17.1 $ 9.0 $10.3 $ 42.1

Share-based compensation expense and related taxes (0.0) (0.3) (0.2) (0.3) (11.3) (2.5) (2.6) (16.7)

Non-GAAP research and development $ 3.5 $ 4.5 $ 5.2 $ 5.4 $ 5.8 $ 6.5 $ 7.7 $ 25.4

GAAP sales and marketing $ 9.1 $10.0 $12.1 $12.4 $ 26.1 $15.5 $18.0 $ 72.0


Non-GAAP sales and marketing $ 9.0 $ 9.5 $11.7 $12.0 $ 12.9 $12.7 $15.4 $ 53.0

GAAP general and administrative $ 2.7 $ 3.7 $ 3.9 $ 3.5 $ 12.7 $ 4.7 $ 4.7 $ 25.6


Non-GAAP general and administrative $ 2.2 $ 3.0 $ 3.2 $ 2.7 $ 3.2 $ 3.2 $ 3.2 $ 12.2

GAAP operating income (loss) $ 2.5 $ 2.1 $ 3.7 $ (1.2) $(32.3) $ 2.1 $ 1.2 $ (30.2)


Non-GAAP operating income (loss) $ 3.1 $ 3.8 $ 4.9 $ 0.4 $ 4.7 $ 9.1 $ 8.4 $ 22.7

% non-GAAP operating margin 14% 15% 16% 2% 15% 23% 20% 16%


Non-GAAP Reconciliation 2014 ($ Millions)Q1’14 Q2’14 Q3’14 Q4’14 2014

Revenue $ 31.8 $34.9 $39.3 $51.3 $157.1

GAAP gross profit $ 23.2 $27.0 $30.3 $39.2 $119.7

Share-based compensation expense and related taxes 0.5 0.5 0.4 0.3 1.7

Non-GAAP gross profit $ 23.7 $27.5 $30.7 $39.5 $121.4

% non-GAAP gross margin 75% 79% 78% 77% 77%

GAAP research and development $ 10.9 $10.9 $10.1 $10.9 $ 42.8

Share-based compensation expense and related taxes (3.0) (2.1) (1.3) (2.2) (8.5)

Non-GAAP research and development $ 7.9 $ 8.8 $ 8.8 $ 8.7 $ 34.3

GAAP sales and marketing $ 18.2 $19.6 $17.9 $20.4 $ 76.1


Non-GAAP sales and marketing $ 15.2 $17.2 $16.9 $18.5 $ 67.6

GAAP general and administrative $ 6.0 $ 4.4 $ 5.2 $ 5.0 $ 20.7


Non-GAAP general and administrative $ 3.9 $ 3.4 $ 3.3 $ 3.4 $ 13.9

GAAP operating income (loss) $(11.9) $ (7.8) $ (3.0) $ 2.9 $ (19.9)


Non-GAAP operating income (loss) $ (3.3) $ (1.8) $ 1.8 $ 8.9 $ 5.6

% non-GAAP operating margin -10% -5% 5% 17% 4%


Gap in Data Volume and Relevancy

Big Data

% of Data

Consumable

by Tools

Broad & General Focused & SpecificTools

Infrastructure

1Gb 10Gb 40Gb 100GbNetwork & Applications Infrastructure

$

$

$


Why Our Customers Buy a Visibility Fabric™

Global Petrochemical Company

Without

GIMO

With

GIMO Saving

Management probes 25 8

Total cost $6.2M $3.0M 52%

GIMO percentage of deal 33%

One of the Nation’s Largest Electric Utility Providers

Without

GIMO

With

GIMO Saving

Management probes 39 21

Total cost $7.1M $5.1M 29%

GIMO percentage of deal 24%


Production Network

Network

Management

Application

Performance

Security

ToolsGigamon Visibility Fabric™ Solution

Private Cloud

SDN

Sources: 1 IDC 2015 market projections. 2 IDC 2015 market projections (Firewall; IPS; IDS; UTM)

The Agnostic Solution

$3.3bn(*1)

$3.1bn(*1)

$1.8bn(*2)

$8.1B tool market

adjacency

Conservative 25%

capture of wallet

Incremental to TAM

calculation:

• Recording

• Analytics

• Inline Security

Incremental to TAM

calculation:

• Network TAPs

• Virtual TAPs

• Software licenses

Deployed 10Gb &

40Gb ports

Number of SPAN &

Mirror ports

Ingress ports into

Visibility Fabric

Visibility Fabric

port premium


The Competitive Landscape

Intelligence

Control

Scale

So

lutio

n V

alu

e

Traditional TAP &

Aggregation

Approach

Traditional

Switch

Approach

Visibility

Fabric™

Approach

Nexus Data

Broker (NDB)

Gigamon 1Q15 Investor Relations Presentation

Investor Relations

Transcript of Gigamon 1Q15 Investor Relations Presentation