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  "docSlug": "a458f84d7f69",
  "documentTitle": "Forescout Technologies (FSCT)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "presentationDate": "2020-05-13 00:00:00",
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  "notes": "The slide uses a line chart to visualize the sharp decline in revenue growth, contrasting actual performance against consensus and preliminary guidance.",
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      "text": "Therefore, we believe that neither of management’s stated reasons for its overwhelming revenue contraction offer a robust justification for its lackluster performance.",
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      "text": "Line chart showing YoY revenue growth from Q1 2018 to Q1 2020, including consensus, preliminary guidance, and actuals.",
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      "text": "Revenue Growth, YoY: -24.3%",
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      "text": "In its press release and 10-Q issued yesterday afternoon, Forescout management attributed its disappointing Q1 performance to A) \"the effect of the COVID-19 pandemic on large-size deals and new perpetual licenses,\" and B) \"customer uncertainty related to our pending transaction with Advent International Corporation.\" We note, however, that the pandemic did not have a serious effect on the U.S. economy until the beginning of March at the earliest, and, indeed, that the first shelter-in-place order issued in the U.S. did not take effect until March 19. Accordingly, we strongly doubt that the pandemic could have had such a powerful effect on Forescout's Q1 performance, particularly as over 50% of the Company's revenue is tied to (relatively new) subscriptions and, as such, is recurring. Furthermore, with management's preliminary Q1 guidance so close to the Company's actual performance for the quarter, we question whether either the pandemic or the deal announcement – both of which occurred after its preliminary guidance was prepared in late January 2020 (per the proxy) – could in fact be responsible for Forescout's disappointing growth. Therefore, we believe that neither of management's stated reasons for its overwhelming revenue contraction offer a robust justification for its lackluster performance.",
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      "text": "“the effect of the COVID-19 pandemic on large-size deals and new perpetual licenses,” and “customer uncertainty related to our pending transaction with Advent International Corporation.” — Forescout Management",
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      "text": "Forescout Revenue Growth, YoY",
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