Symantec Reports Second Quarter Fiscal Year 2018 Results
Financial Q2 Highlights
- Q2 GAAP revenue $1.240 billion, up 27% year over year; non-GAAP revenue $1.276 billion, up 26% year over year
- Strong Enterprise business activity from market-leading Integrated Cyber Defense platform; double digit year-over-year deferred revenue growth excluding impact from divestiture
- Consumer Digital Safety revenue exceeds expectations, driven by strong retention and growth in average revenue per user
- Completed previously announced cost reduction and synergy programs ahead of schedule
Operational Q2 Highlights
- Continued focus on innovation with the introduction of Symantec Endpoint Security for the Cloud Generation, offering advanced capabilities in deception technology, mobile threat defense and Endpoint Detection and Response (EDR)
- Continue to lead industry in cyber threat research
- Robust demand for secure web gateway, with refresh underway
- Rapid growth in Enterprise cloud security offerings
- Record LifeLock enrollments; strong start to cross-sell of LifeLock into Norton customer base
- Completed sale of Website Security and related PKI solutions to DigiCert
MOUNTAIN VIEW, Calif.--November 1, 2017--Symantec Corp. (NASDAQ: SYMC) today reported its second quarter fiscal year 2018 results, ended September 29, 2017.
Greg Clark, Symantec CEO said, “As large-scale, sophisticated attacks during the quarter underscored the importance of cyber security, more organizations and individuals entrusted their protection to Symantec’s Integrated Cyber Defense Platform and Consumer Digital Safety solutions. In particular, our Consumer business exceeded our expectations due to heightened demand for a single trusted partner to help protect their digital lives.”
“Our focus on execution is working. We’ve successfully returned our Consumer Digital Safety segment to growth, our Enterprise segment had strong business activity with substantial year-over-year deferred revenue growth and we completed our cost reduction commitments ahead of schedule.”
To help readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Additional information regarding our non-GAAP definition is provided below.
Results for the Second Quarter of Fiscal Year 2018
|Q2 FY18||Q2 FY17||Y/Y Change|
|GAAP Operating Margin||(0.7%)||(1.2%)||50 bps|
|GAAP EPS (Diluted)||($0.02)||($0.23)||$0.21|
|Non-GAAPOperating Margin||34.1%||29.2%||490 bps|
|Non-GAAP EPS (Diluted)||$0.40||$0.30||$0.10|
|Third Quarter 2018 Revenue||$1,227 – $1,257||$1,250 – $1,280|
|Third Quarter 2018 Operating Margin||(3%) – (2%)||36% – 37%|
|Third Quarter 2018 EPS||N/A||$0.42 - $0.46|
|Fiscal 2018 Revenue||$4,877 – $4,977||$5,000 – $5,100|
|Fiscal 2018 Operating Margin||1% – 2%||35% – 36%|
|Fiscal 2018 EPS||N/A||$1.66 – $1.76|
As we completed the sale of our Website Security and related PKI solutions to DigiCert on October 31, 2017, the related revenues and expenses for the month of October are included in our guidance. Revenues from these products were $203 million and $214 million in the first six months of FY18 and FY17, respectively. Due to the impact of the sale on our GAAP operating results for Q3 FY18, and the lack of information available to estimate the resulting net gain and income (loss) from our equity ownership, we are unable to provide GAAP EPS guidance for Q3 or the full year of fiscal 2018 at this time.
Symantec's Board of Directors has declared a quarterly cash dividend of $0.075 per common share to be paid on December 13, 2017, to all shareholders of record as of the close of business on November 20, 2017.
Symantec has scheduled a conference call for 4:30 p.m. ET / 1:30 p.m. PT today to discuss its second quarter fiscal 2018 results, ended September 29, 2017 and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For telephone access to the conference, call (877) 475-6198 within the United States or (970) 297-2372 from outside the United States. Please call 15 minutes early on November 1 and give the operator conference ID number 98698099.
A replay and our prepared remarks will be available on the investor relations home page shortly after the call is completed.
Symantec Corporation (NASDAQ: SYMC), the world’s leading cyber security company, helps organizations, governments and people secure their most important data wherever it lives. Organizations across the world look to Symantec for strategic, integrated solutions to defend against sophisticated attacks across endpoints, cloud and infrastructure. Likewise, a global community of more than 50 million people and families rely on Symantec’s Norton and LifeLock product suites to protect their digital lives at home and across their devices. Symantec operates one of the world’s largest civilian cyber intelligence networks, allowing it to see and protect against the most advanced threats. For additional information, please visit www.symantec.com or connect with us on Facebook, Twitter, and LinkedIn.
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Symantec, the Symantec logo and the Checkmark logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.
This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including the information contained under the caption “2018 Guidance” and the statements regarding Symantec’s other projected financial and business results, including demand for its products and services, Symantec’s enhanced capabilities and the impact of the Website Security and PKI solutions divestiture. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: the divestiture of our web security and PKI solutions and risks related thereto; the retention of employees of acquired companies and the ability of Symantec to successfully integrate acquired companies and to achieve expected benefits; general economic conditions; fluctuations and volatility in Symantec’s stock price; the ability of Symantec to successfully execute strategic plans; the ability to maintain customer and partner relationships; anticipated growth of certain market segments; our sales pipeline and business strategy; fluctuations in tax rates and currency exchange rates; the impact related to our future adoption of the new revenue and other accounting standards; the timing and market acceptance of new product releases and upgrades; and the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Symantec assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec’s Form 10-K for the fiscal year ended March 31, 2017.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to the impact of purchase accounting on revenue and cost of revenue, certain acquisition, divestiture and integration costs, discontinued operations, stock-based compensation, restructuring and transition matters, charges related to the amortization of intangible assets, non-cash interest expense and amortization of debt issuance costs and certain other income and expense items that management considers unrelated to the Company’s core operations. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial results. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management team uses these non-GAAP financial measures in assessing Symantec’s operating results, as well as when planning, forecasting and analyzing future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations page of our website at: http://www.symantec.com/invest.
Kristen Batch, 650-527-5152
Nate Pollack, 650-527-7906