NLOK - Earnings call transcript Q2 2018

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Operator

Good afternoon. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Symantec's Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank the Mr. turn over call now to I'd Nate Pollack. you begin. may Sir,

Nate Pollack

and posted thank Good year our We've webpage. and Speakers you Greg Relations call call our and remarks financial to CFO XXXX website are call earnings to referenced prepared to for to press stated. refer of supplemental for during presentation their metrics. definitions This measures, results. on reconciled fiscal below. remind joining Events non-GAAP financial non-GAAP, supplemental quarter otherwise on for believe measure afternoon website. financial call Investor that financial reasons We comparable on provides posted live materials together non-GAAP CEO, second discuss GAAP the our non-GAAP commentary earnings release are Nick today's the operating our performance Clark, for of Executive regarding to corresponding Noviello, a our measures, in references our all and that unless measures further Investor on taken Vice the be Relations the everyone materials is replay available this when our Please to Symantec's I'd are webcast discussed website. like President GAAP and CFO. note, with metrics via posted our will information Please meaningful financial

expectations, differ we a accordance with financial and financial assessing also forward-looking are and should understanding current the measures. based for operating information. to prior information environment our investors from the GAAP. of uncertainties measures current on non-GAAP not Please non-GAAP in that of call results, based see substitute materially measures statement release beliefs, risks and refer presented financial expectations. as as results supplemental may cautionary date statements measures non-GAAP assumptions uses Non-GAAP only to that in current contains are cause speak as to Those periods. future annualizing more actual performance such, and forecasting involve for press those and We when periods the it. currently be considered our the financial statements from comparisons benefit of well and, on Our planning, management believe team as our facilitate financial Today's as our in our

also will factors in our detailed and, with our particular, SEC Report XX, a You on on March Annual our find for discussion XX-K risk about the Form year in ended XXXX. fiscal filings

to CEO, Greg. Go I'd introduce our Clark. Greg ahead, Now like

Gregory S. Clark

marks of strong in joining Thank Symantec you and a inflection afternoon. for represented for an our point us, QX quarter and journey good transformation.

Our results guidance. end our QX came that our the in EPS lower results. of With guidance mid-point revenue are very of pleased the we at said, with our and

Let me explain why.

Coat synergy our and Symantec million LifeLock These Blue we achieved First, all $XXX and last quarter, cost schedule milestones milestones critical program, have were many completed improved million Enterprise as including the divestiture profitable significantly these and synergies. well completed year our cost enhances resulted ahead reduction Enterprise After PKI our transformational our and continued and the across which to high solutions as Consumer of integration is segment of potential focus. DigiCert, our sharpens this margins of now growth also in initiatives, growing its segment. for segments. one $XX long-term Yesterday, Security Consumer margins Symantec Website our and we both a business completion for and our and reduction

in Our a Enterprise QX. result strong business had

moving the a revenue Enterprise Enterprise targets. year-over-year. operating our deferred ago, flat segment a year While for acquisition margin ago us year delivered XX% basis, QX improvement grew longer-term an We've from revenue also segment of adjusted our XX was towards from margin on points in

superior These Analyst strong trends are our increase also a the validation architectures. integration, expected. Integrated We our revenue the shift recognition designing into More shift to strategy overall Cyber than Our multi-product The virtual in more in-period at is cost that choosing increasingly because towards is are leading last working. our our platform recognition. bookings Symantec Cyber and multi-product products an remarks to of on customers security deals. of cloud, ratable Integrated we subscription is which of standardize and Adoption future Defense in of customers ownership. however our mix cross-product is and this their anticipated of are happening our is protection, number Defense Day, lower more affecting appliance deals, revenue but and customers our cross-selling are platform as Financial shifting faster in our mix larger adopting

QX, Although these of in they trends indicators this are Nick topic will in revenue remarks. segment his future Enterprise for positive prepared leading recognition growth. further our affected discuss in-quarter

higher we on growth Our and Consumer Safety and for of it our to continue the based of revenue subscribers segment growth. overachieved XXXX as direct in Digital fiscal QX Digital improved We to a guidance retention. expect continued customer of in future segment the momentum ARPU. added moderate Norton through subscriber declines gain increase the the an Safety members in extremely our through second fiscal segment the the LifeLock breach new in September, revenue our define about year half, the was Norton Consumer of cross-sell mid-single Digital year. We're in new growth results. number we but to announced are the into revenue of on remainder base after we business, to install track on Safety. Consumer contributed the marginally digit solution category Consumer only confidence forecasting Based the is this excited exiting substantial The Equifax QX

is XXXX, Symantec plans. For half fiscal to of well-positioned achieve the second our

across our Enterprise and have we integrated portfolio and developed We compelling a acquisitions have Consumer.

guidance, sales the for productive. the and and continued PKI impact incorporates DigiCert. of including larger Enterprise eight capacity Security opportunities, revenue Our year these second including number we after are pipeline, sales and goals now our record that adjusting fiscal half our of growth our Reaching an our over our of pipeline second supports target, Website Enterprise have and ramped is a And divestiture rates the conversion deals to reaffirming figures. we for sales historical of solutions EPS XXXX half

Let that cyber-attacks these discuss me that major as quarter, industry. attention. leadership has products well and public in performance and Symantec interest reaffirmed Symantec there incidents, Last received wide-spread as environment. threat were driven the very our now in relevance in the fared well long-term several increased

caused enterprises are well in as security and and attacks mind general and the as of in well measured economic WannaCry damage public. enterprises the making First, consumers. Ransomware to attacks top Petya the significant room of as hundreds millions dollars, as board ransomware unprecedented impacting cyber extortion of

the be future generating threat as mobile our mobile. primary ad on cyberattacks called protection breach also released In six to will breach September, quietly a systems, substantial providing of significant one inside difficult to in believe helped paramount. We're Mobile come regulations driving that digital vulnerability enterprise active devices. customers protect discovering vector, WiFi years infections a in the consumer critical and uncovered and building into a October, devices, apps XX% a for XXXX found than unpatched will team the apps as of creators. devices Symantec on attack a event intercept attacks. The operating Skycure. labeled for for protection first breadth energy in current new threat are ever. more VPN. XXXX, now last potentially in predict been allowing conducting acquisition of all to these that very threats be result attack recently We distribution. consisted last makes data activity discovered of them The Symantec by Intelligence threats closed vulnerability make This demand most our allowing the of team in globally was XX% on the up of the the to million Sockbot. is leader has for value and reminding have also system During quarters to We demand patch them from new attacker months a reality XXXX. a team threat Equifax XX% with importance occurred record. on trend been Play ransomware sophisticated revenue for the This vulnerability, focusing seeing of of the that operations the consumer the to Equifax coupled malware block Dragonfly to is is We attack concern prevalent of quarter, store the vulnerabilities the with needed which the botnet Sockbot bolstering of reconnaissance research also X.X recent Threat near Web an discovered significant of which and A apps us possible enterprise, is example has threat the how about In group, our of disrupt relevant boardroom problem research and traffic. Edition, contained This and operating recently report even up research a power month our of Symantec malware. in a downloaded reminder the it across modification mobile our Minecraft an during The actually the safety. these is like the GDPR in adversaries Pocket firms, Google that data sabotage eight KRACK been characters but delivered have intelligence for as Android infected well

business. Enterprise our to turning Now

Defense Our with Integrated is Platform resonating Cyber customers.

As strategic to security increasingly landscape, architecture around enterprises their rethinking deal with they evolving security threat are capabilities building are their the Symantec.

out for turn and SEP innovation our platform, delivered to on Now a Integrated have laid cornerstone. Cyber the of on we is as which with roadmap our commitments these strategic component our endpoint, Defense XX endpoint. year, we Last let's

and Our our SEP SEP X.X, last latest XX.X, updated Mobile, week of product. milestones EDR releases our major were ATP

traditional delivering releases, an that approach multilayer protection across we're now endpoint and delivered modern a defense agent. integrated, is these to single providing endpoints, depth in scalable, With from

protection and list first providing multiple mobile files and deliver intelligence architecture. been optimizes across This agent One also been It well suffering improve We high in represents able our believe new who IT We technology. Deception to the uncover SEP we're improves helps customers set our on enterprise endpoint SEP major and allows be new adversaries policies who against managing our detection now customers, have innovations. to technology this threat posture uses one hidden in achievement product in legacy a endpoint costs, help single fatigue technologies have XX, them breakthrough for is devices. with also seeing in the customers endpoint line received aggressive to suspicious our defenses. portfolio. EDR been wish vendor enterprise SEP posture. environments, and rates. integrated to with environment, a XX.X continues simplifies which SEP customer and advanced into improved endpoint specific renewal only This for other some sophisticated providers. vendors. includes has decoy from XX.X both different running security the our Deception XX.X and in lowers to accelerate deception, the and resulting actionable groups evade next-gen key them displacements in their base of more innovation our SEP Endpoint and industry their security than product We're Symantec third for sourcing Protection is security milestone are

with closes and activity responders flight records data to install. competition the endpoint has year X Our adversary series us we valuable including differentiates agent our new seats. from of and million recorder Xx technology are file-less over at and further EDR forensic intelligence, provides called functionality. the recorder all a with This seen gap incident and ATP, X.X to no strong enhanced ago, of solution, ATP on adding attack growth flight now detection a versus

the We in endpoint EDR to agentless now also automated quickly closed last we environments customers ability without defend Adding introduced systems. and differentiation, to operating have for to investigation perform SEP. Cloud quarter scanning our

we BYOD endpoints With we protection. of customers Mobile, protection Android defend we are now and for call in our Skycure, the iOS, Global also advanced corporate with data SEP Network, our from integrated and and We've to acquisition threats from are to integration a across value mobile mobile Intelligence this iOS Mobile already leader SEP multi-layered Windows. successfully seeing delivers great Android, customers. devices and for Skycure

defense which threat and and on-premise, of spot. game-changer outstanding access is need network blind is the and are Cloud gateway dark increasing To our more cloud, technology security and and isolation security in data our endpoint, rapid control in access across is email, for the Isolation available to secure becoming they Integrated The customers. Internet efficiently to Cyber adding and cloud this our brokers with as for traffic security enterprise quickly cloud configurations. platform. our turning Fireglass Symantec's web. point, to encryption, differentiates Defense going compliance from adoption relevant the defense encryption applications delivering proxies are hybrid a are cloud Now is Symantec solutions. in authentication built an protection In and growth. enterprise, experiencing broker decrypt multi-factor applications line eliminate the drives to

cross-sell some facing extending adding the customer our a isolation, platform to of that Cyber for proxy from Integrated platform integrating capabilities against integrations at company and vendors. their the was of ability adoption. existing competitive Cyber CASB, from footprint their and leverage to for insurance into of examples and we execution Defense chose This Integrated showcases proxy as a A components include win deployment. our loss to proxies adopt true core how large This Now illustrate by refresh defensive cloud our driven time these endpoint well platform platform. sandbox proxy refresh across on-premise point and SEP Symantec, the as on the solutions is additional Defense mitigate

example vendor Stitching vendors multiple across together consolidation. our typically by can a adopt choosing we traction and and Integrated the expensive with Defense is overhead point integration Another portfolio Cyber of avoid is of sustainment risky, platform. complex, Customers solutions where to fragile. see

Symantec costs device competitors, customer a large understood DLP DLP, Integrated SEP, example, seats. their and purchased impressed medical long-time cloud more Cyber of not a SOC with was They also innovation which for vision integrations, but encryption, our this were and our manufacturer but endpoint been an customer only has platform. of CASB, than their their our who selected Defense For their improve IT environment, productivity. concluded one XX,XXX We total our customer, cross-product proxy will and technology simplify cloud for and posture, for increase security lower

and The retailers. customer Symantec they looking customer are solid involved defense Office endpoint last that QX partner capabilities to purchased federal invested their for been more largest pleased quarter Another government had saw and deals for government Symantec in is competitor a one This portfolio. example closed vendor an consolidation our of seeing for solid displacing heavily capabilities SEP we quarter. email. around in but EDR incumbent us for DLP large typically and than seats, XX,XXX We agent build ProxySG, our chose of Europe's for and and single procurement several XXX. we their a as journey a with to customers spending saw I'm large security Symantec. email.Cloud

Core our Moving proverbial the adoption consumers' an to of we of breach identity acquisition across spans have our and and created protection Consumer volumes LifeLock. LifeLock, happened, Norton safety protect Digital When of that brand launch privacy for was LifeLock. devices, that to have single both and The landscape partner breach Safety. was, devices strong Equifax recognition category stated With WiFi solution, the protection the wanted to knew the identity what LifeLock why information, for digital evolving up and identity. in to LifeLock brand strongest is This and they customers home. signed to digital straw. new a and last demonstrates our but Many the their and for continues extends knew the postponing remediation. speaks solution. the they eventually were of protect it, threat consumer consumers identity, need safety recognition They consumers'

we that mid-September. LifeLock from the One acquisition cross-selling to time at was the early the investment Norton cohort. the our LifeLock with of solid pleased launched the themes opportunity discussed into in the We're campaign cross-sell of traction

discuss when progress our will cross-sell the QX results. to our of more have We we share efforts on

markets. excited remain about LifeLock expand also to opportunity the into We overseas

customer more to which retention relevant to be quarter. in trusted continues reflected last continues improve. are the customer that headlines product ever security, Recent and than strong underscore Norton rate in most was we Our brand consumer retention our

important this As momentum element vulnerability is WiFi WiFi we our how Norton highlights the spoke earlier, sales an consumers safety. VPNs seeing strong month's of in in and KRACK We're for product. digital continued of last for VPN importance protocol the

market We will well-received expanding is this last Core we transformation It quarter. segment of also The our quarter. succeeding. our the rolled be out in Consumer and been has Norton rollout

half as we Consumer and PC We've our Analyst the business first exceeded safety at the value have Financial growth, for out much and solution focused being transitioned our Day We for expected June. for Security consumer. laid acquisition, last a on adjusted Mac to from digital broader Norton the proposition

Safety and Consumer we expect resonating expansion more next with quarters. Our ever ramping Cyber the working be two platform vision segments. of across Defense strategy we will the with cutting-edge and innovation leading In is than our Digital customers we Digital is and summary, we believe Safety both over are Integrated significantly

Now turn discuss to Nick the financials. let me call the to over

Nicholas R. Noviello

and posted Relations Greg good you are to Please to CFO references everyone. and Thank non-GAAP, metrics supplemental are unless topics walk highlights There everyone Investor commentary financial and like website. I like otherwise today. through to a that all remind stated. afternoon set our to I'd of you would we've with note materials

First, I'll review our fiscal QX results.

we significant our in reduction and integration reached Second, initiatives. the run synergy milestone through have we will cost

with I of a of our framework Third, solutions divestiture of the around with the on announcement the call Security Website how PKI worked. earnings last you and impact financial the quarter, shared our divestiture

to Now, our will with transaction fiscal update and QX on I closed, impact the the the year you of divestiture guidance. XXXX

elements our I with reiterate will outlook. understood, Finally, all of close medium term these and

for start QX. of with me results an overview Let financial our

guidance. midpoint our foreign versus quarter prior range, $X.XXX revenue revenue of benefit prior guidance billion, second our about slight was at currency the Our a including

the year-over-year delivering, prior the in but planned, ratable at segment, health Safety Let of growth guidance adjusted place business in capacity revenue in-quarter than Consumer strong our the me at revenue segment, the of guidance flat QX follow currency and revenue segment. mix at accounting, impact and be purchase end our see in combination low prior prior to our less in in-quarter of This XXX segment, and our a revenue Overall from clear, shares and which acquisitions, lower the at the convertible comprised share Fully and prior EPS, recognized and sales increased of more in acquisitions. diluted growth shares, our range, notes track diluted the Security X%, notes Fully in end for $XX our our deferred Operating revenue, for a of million. to versus revenue of Digital growth you up of of low marketing the $X.XX, range. $X.XX in the revenue for To low guidance in to million has tables range. segment as spending various the Safety price. for and recognized balance Year-over-year adjusted approximately can million per due divestiture recognized on from at XX%, XXX M&A low year-over-year the our QX over were flat from give revenue, more our Consumer revenue guidance despite Enterprise costs Safety convertible driven look and earnings by stock as in-quarter forward. related Digital range, deferred Enterprise end our million finished Consumer from Consumer XX%. constant headwinds This costs. Investor revenue dilution second growth was divestiture indicator margins time, our of prices. costs flat, lower marketing the statistics guidance X to XX% prior outstanding in was segments. the high posted Security At by lower segment in deferred was our of you dilution revenue Digital same for was of revenue Enterprise was our was prior Relations at resulted Enterprise a end of Total divestitures revenue but included relative with share website combination business. of by related shares less impact of partially costs, to going to quarter We totaled results higher business count to shares our the the Digital quarter and impacted tailwind and is from segment, guidance and to a in margin sheet. XX% the our deferred on share Please diluted see segment increased where mix quarter, revenue at our range end and approximately the M&A headwinds Safety of

during $XX activities million and the Finally, was $XXX cash flow from was CapEx million. operating quarter

QX Now detail in our let's discuss operating performance. more segment

Enterprise First, Security.

on revenue constant segment Security currency basis. grew was million Enterprise XX% and $XXX a year-over-year Our

Security PKI As account and you also the results now We for DigiCert. solutions incorporates not know, did sale have the segment our to Security sold of Enterprise financial the we Website as ultimately results these related balance to are liabilities on operations, and for of discontinued held and part sheet incorporated Enterprise so financial sale. overall in the as solutions included the the QX, segment as assets

have our of and of cross-sell in expectations; At We transactions large, Enterprise Investor with set the the year-over-year. our flat X% commentary time, adjusted a deferred Overall, in-line assist up Business in more experienced the acquisitions excluding year-over-year, and Security revenue solutions. we segment strong, up modeling. Enterprise greater mix you growth ratable information Security however, Website revenue to Enterprise was XX% for website and constant CFO was Relations was our on adjusted in Security quarter. activity a same PKI included currency your in

security customers show the the for for in it term. quarter revenue, consistent cash embracing did And financial degree, in show term. creates with into and long our ratable deferred our it recognized business more flow, and quarter. building this the greater we not with IT expect model, up and will respect Integrated to Our revenue up architectures Cyber To are their Defense platform long are business as visibility

earnings Symantec's confident indicated business, our robust and part will and pipeline in recognized quarter. variability deferred as between gateway franchise, XXXX ProxySG. to second as said, visibility some quarter continued continue fiscal We disclose That each half have we to for Enterprise we have are revenue, of refresh revenue also the expect of in which, previously, web we experience a which incorporates secure

margin Enterprise reflecting Security to points take costs XX operating growing business. up out in the while year-over-year, Finally, continuing XX%, was our success

to Safety. Consumer Turning Digital

Our revenue Consumer adjusted basis. and currency constant constant grew than the a currency Digital was grew quarter second more Safety for segment growth $XXX adjusted above revenue and XX% the X% and X% revenue deferred which was Consumer flat. in X% our acquisitions, grew of year-over-year high This continued to of revenue Digital end to by year-over-year, million in on Safety quarter year-over-year is compared QX revenues, decline X% in flat Norton, growth. prior of of the LifeLock driven stabilization declined guidance was consecutive year. Outperformance plus a double in digits year-over-year, and the which

to we will line forward, our customer product safety discernable. growth solution digital be the transitioning rates less base for Going anticipate and be to each

result, plan we future was minimal not split in Equifax these several Since but new Norton after added joined of in a do the to contribution new for provide a in growth the breach expect from LifeLock As the saw we weeks members the announced in members QX, quarter, revenue and benefit out the to LifeLock last number substantial periods. September. revenue We in of second see future. them

o Direct in Consumer XX.X QX X% our up which customer from quarter, are commentary. $X.XX to up the the million X% month, to CFO at Direct metrics, of from end count QX. ARPU increased per defined the Moving was

in was And, XX% represent at revenue to approximately If one we customer direct $XX million. point any partner the you stream of recall, revenue time. these statistics expect

QX operating Digital Safety was consistent our Consumer margin XX%, margin. strong with Finally,

principal quarter, In senior million including investments Turning billion end term authorization Board of allocation. sheet. our from our as $X October, the to have billion our the share balance gross we And and in balance we second in sheet further loans of debt, and to repurchase $X.X At we prepaid had the fiscal of $X.XX and $XXX of billion notes. short-term on remaining under convertible the deleverage capital current Directors. million reminder, a $XXX cash

announcement. I'm integration of pleased in about $XXX that budgets acquisition. executed the the Consumer we've In drive share to to the synergy customer Safety also achieved and Blue segment, successfully our cost FY reduction committed to LifeLock XXXX the million integration leveraging reduce marketing of now QX commitment to and we're reduction at synergies, schedule XXXX of and me net cost the announced committed we've Let million Coat Digital fiscal and $XXX our initiatives. cost on acquisition acquisition synergies pivot combined and our strategy year the Norton ahead of cost already talk

As seen in our is optimization just than our ago, operating cost drive actions. more year efficiently and business a efficiency we to operating continue and margins,

look our expect to and fiscal costs continue to year. cash year related we we As restructuring XXXX, to decline commitments transition this from to materially

Now, plan expenses, discuss transaction net primarily Website our sale We the Security DigiCert DigiCert. of to taxes in solutions a received to PKI employee the let proceeds, of transaction me to use further closed approximately and yesterday in and related after successfully debt. repay and We incentives. $XXX to the million cash stock and interest equity effect ownership XX% common giving expected proceeds

investment. the were Through included under PKI ownership results from segment our financial our Security stake the for Security solutions Enterprise the results. of account the second will quarter, We and Website equity in method

of more For provided website. information posted Investor included our in October the the regarding will for month segment results. be QX, our materials We've and Enterprise the Relations on historical in PKI Website revenues supplemental Security solutions

now allocated burdened fiscal products impact full costs transfer million and lines, basis, Last framed slightly of just Website the no we and which DigiCert. per continue previously There PKI to to $XXX to over guidance of changes in operating income. result these quarter, are the the include that year on over estimates. with year divestiture. prior were be I that the indicated stranded $XX Symantec contributing, would the year million not product a prior also I closing Security million sale, as will in are our to of revenue $XXX a updating to XXXX As

Moving fiscal year to updated our XXXX outlook.

XXXX for was Our on but at nominal on basis, was a QX year reconfirmed fiscal guidance initially currency earnings in updated currency. favorable a constant provided basis, our foreign call May

elements: we changes acquisitions from revenue and results five $X.X November Security currency. of previously $X.XX combined two for additional PKI the solutions. our March, of divestiture this billion billion, of outlook a the the guided of our to revenue billion divestiture our net previously guidance update of midpoint adjusted decrease impact Website At X% $X.X constant the for to $X.XX going impact revenue are the in results and total represents currency foreign divestitures. through in The exclusion full to of we approximately and guidance, and $XXX income months, Now, The year these favorable in of growth million. of billion planned expect

Now adjusted currency, X%. and I'll Enterprise segments. X% to guidance provide expect compared of to revenue for for our constant previous We Security growth X% guidance acquisitions for now to X% divestitures our revenue

Greg deal supporting second with a for Enterprise pipeline the our is revenue strong record indicated, of half opportunities. number large a As guidance

we We to expect QX are revenue. up to adjusting down range we guidance X% have slightly subscriber, growth revenue to resulting from Consumer X%. our forecasted FY And Digital that deferred as X% QX, the guidance improvements Equifax compared is of previous in-quarter revenue reflect as Digital as seen to well guidance Safety Consumer already and our the Supporting ARPU now XXXX sheet Enterprise million of reduction our approximately revenue growth $XX X% Security retention through the the breach. balance showed of Safety on member

divestiture. guidance driven for to We margins to XX% previous the of fiscal year XX%, by expect compared of XXXX to XX% operating primarily XX%,

full-year On previous EPS expect to $X.XX, reduction $X.XX. divestiture $X.XX a guidance $X.XX $X.XX XXXX as related to to EPS in by $X.XX of and divestiture, The fiscal would the to well $X.XX. the QX. impact year (XX:XX) had equity M&A guidance of for we prior to compared indicated of Finally, primarily as is the driven of our we EPS, divestiture income last which $X.XX to benefit costs have included call, our earnings incurred of

guidance This from billion. Our does from equity not cash $X now revised our guidance total to includes $X.X which flow EPS billion FY approximately to impact $X.X guidance FY the in We and to of $XXX of continue income XXXX. interest. we compares updated impact operations include provided of that to the project costs, Analyst This at the million other of $XXX Financial XXXX restructuring, we million Day. to expect related transition, expect billion

$XXX from cash expenses with the million fees, one-time with approximately of reduction benefit operations $XXX cash items including and cash other the deferred the revised operations associated $XXX divestiture, Our includes million following. from of the and approximately Approximately guidance of flow divestiture, million revenue. taxes, associated

Moving quarter third to our outlook.

now Our for revenue Website third and quarter Security billion quarter to $X.XX December to up for On third nominal currency and of adjusted excludes in basis, divested X% the guidance the acquisitions a $X.XX PKI X% we divestitures. November expect billion, constant and solutions. plan

currency We Consumer increase adjusted segment acquisitions expect for X% our Enterprise constant both Digital and revenues to for increase X%, and to Safety with to rates divestitures. and growth our for X%, X% segment to

We to underlying EPS expect expect total And XX% XX%. share of company $X.XX, operating of we $X.XX million margins reflecting of approximately XXX an to count shares.

Now, medium term let me close outlook. our with

year and we fiscal year be continue fiscal to our out excited XXXX, about Looking XXXX future. to very

call. on we provided our guidance are earnings reiterating last We the

low growth be revenue in margins the digits, our mid-to-high is organic to in total operating EPS This in the expect potential supported for by and with teens. high in fiscal positions business the XXXX single XXs, growth segments. and strong XXXX growth of We each and

on Integrated to marketing have what support strongly and at Consumer the used together margins our in the digital the Security of Enterprise turned up-sell single Cyber presence, digits, we digits corner have high engineering XXs, organic revenue side, are and breadth place growth growth the on opportunity strategy, Consumer of and And organic our support Defense the on operating with take the base that that that margins sales brands, our based Safety safety we in-place low-to-mid our double Digital single over to and operating platform cross low already with We Symantec, revenue seeing the Enterprise of dollars, feel be high in the power capacity capability, XX%. the strong the post divestiture. platform, installed the

the Now take it let's Operator, from transition call to please Q&A. here.

Operator

Certainly.

I then, some across Hindlian mix that driving help like Sarah And All description impact we'd Sarah some segment but just the shift as business get into Macquarie the sounds Capital question from there - Thank you a first results deferred what wanted of love guys. revenues revenues quantify to is Our line? divergence Hindlian little the which from Hey, Macquarie. (USA), there, right. Inc. bit, are a very much. is Enterprise and related, reported on shift in within color the in-period some Nick, mix in of you Enterprise is me maybe can that the period? just segment follow-up, line

Gregory S. Clark

the Okay. for Greg question. here. thanks Clark Sarah,

are of a that going. things So couple

amount a increase for underscore step QX. in drove. in First and the of you that us also, margin It we're to sequential as we of was see sold can with like business the big up I'd that all, the we pleased very

Defense seeing an commitment are to Integrated our We Cyber increased platform.

couple We a of things. bigger by subscription our are in is seeing driven product. uptake This

parity point virtual We a where at is appliance now a feature the an the same. and say client between are

In VMware there improvements there virtual and platforms. some where these things have hardware configurations underneath perform been than better substantial appliances the are some as even fact in like clients physical

increase. are ProxySG seeing seeing uptake of So We're strong this a we is capacity driving where our a refresh. very

We're a of there. to seeing in-period product delivered. also product, seeing DLP of DLP shift we powerful are movement to a This as revenue instance same the our have very the does subscriptions. create subscription We cloud in

flows. and that the this are guide shift noticed from We you terms. we and And we XXXX standard abnormal in increasing mix terms increase our revenue are cutting driving as see comments seeing are an flow fiscal We're cash Nick's you revenue. normal can is in not remarks, our cash deferred and discounting, reaffirming

... deferred and So amount there selling the actually of in correlation between the Nick, revenue quarter. strong is a business anything the right

Nicholas R. Noviello

couple of as points let add for well. Yeah. a Sarah, you me

basically Enterprise to script $XX I the on revenue indicated of revenue the moved side that the million of forecasted in deferred fence. So in-quarter

growth. through the the revenue through really from through kind GAAP So statistics CFO I to have on going what's on we some our the full really divestiture, the deferred business quarter. the we which growth, that. on the And performance clean growth fence, that deferred That's where think my long-term that the up term at can combination revenue of Security lines. actually through Enterprise of and recognized both is, we deferred about deferred a We've in-quarter and on the And revenue the got we've on of comments plus through revenue, And XX%. commentary, LifeLock say, look side and the really us walk the PKI. done let's the to Veritas, but conditions purchase exciting excited really of all do a that we're business accounting, Website is work time disclosed of of deferred and here, about short at math underpinning pretty revenue deferred are as in perspective really giving and

Gregory S. Clark

ability give Analyst the Day, the to financial the we to reporting added at to deferred just wanted the get on be handle better a revenue because we Sarah, metrics people Also, able to is It's We growth. about anticipate mix faster plus Revenue did news a we deferred shift. to And actually the way happening story. we're thought. It's than a excited good it. that. do little

Operator

is question next Saket from Capital. Barclays our of And from the line Kalia

Saket Kalia

business follow-up this acceleration. you you. we for walk that. I've Enterprise in through got at Qualitatively Thanks year here. half drivers look after questions just the guys. Nick the Greg, my us SSL, taking And a for if can Hey, with start second we'll of for excluding the maybe

Gregory S. Clark

Yeah, definitely.

this QX. on now a key think kick have of mentioned saw our we comments I in, that in ramped Analyst force, the We and we and one sales Day. things Financial in

you and goes the execute the a second through excited is the that have, of prepared really we about we of that is transactions. around There we and to in to cross think, really that. which Blue that, the some hands-on We're and of the bolstered commensurate do it, can We prepared the half also have in the we refresh close pipeline examples on remarks, with really Cyber is strategy size Defense, Integrated of that seen some a in larger by sales working. We – now still enough deals were now I evidence work that selling cross-sell talked force. have that the that those number examples remarks ramped very and give to have Coat

we'll are some we in but across As all ones large be there believe that. there, mentioned, successful we

value same you that have is to now as to some to don't The deal trying competitors you've three got happening is other with the stuff And cloud, get to or cloud to get vendors four SLA in thing work hard. proposition. you've to the that's move cloud concert go, and really

for point big leg fragile. it's that, in difficult got on the to if we've especially think you the do it's cloud to a those up competitor. I try together CIO solutions, the So And expensive, it's hold very era

we've look we've and the pipeline together got lot product of that see given can need confidence we've so and And the at that all think growth a us we capacity, we ramped today right put deliver we half. outlook. reaffirming And the our to what second our we as in as that's got got you

Saket Kalia

can little That's remind $XX how of commissions? moved about a balance maybe sales sheet, with more do a sales you it. bit my Got but those can Or amortizing million We commissions you commissions? you for very we upfront helpful. talked ratable the you just and us follow-up recognize you, have to And for the remind Nick, that are us mismatch revenue?

Nicholas R. Noviello

over time. amortized are Those

effect in acquisition any, policy Symantec that that So it's that see any in to we do that at and been we is we move something policy. that's a and fact,

Operator

our from And is Fishbein next from line BTIG. question the of Joel

Joel P. Fishbein

guys. Good afternoon,

and two forward? Greg, feeling valuations right about quick need you the Cyber going is now? you there Are question how the follow-up. resonating short that to And are there out where the current platform augment think areas ones, are that Cyber with you're here that Just obviously, in any Defense or a customers. falling a Integrated you Defense

Gregory S. Clark

we very pleased portfolios. very have, Cyber Defense and So on both there with I Digital side that Enterprise Consumer, the strong also Integrated are are the on the on we think portfolio Safety side

well. lot a driven also third as with have We parties, of integration

definitely year really valuations, our control change disciplined they I destiny doing are talk equity, we that now, not very a the finances. absolutely as our we're really work We're out we We disciplined customers, right And those. in through good think portfolio. as other ecosystem of we have the around And we few we with the right then ISVs like our have. about also and do the able our can going execute we are acquisitions, sure M&A. you around sell have strong very all now, and we the that to and small we saw that to to I plans can around time. that what things But our past. like in upset in a M&A we totally do product for we make mentioned with our anything we set We're think are setup Those So work disciplined we have. with

Joel P. Fishbein

as a then just And follow-up. quick Great.

some about And environment just of threat there? Can us driving we refresh? are proxy. threat adoption you adoption think tell if where with you proxy be the environment you the talked will driving quicker You think

Gregory S. Clark

answer first. refresh question I'll I think your

are is for very We That's are of larger the whole saying of you new well. some adoption deferred be and many consistent some than strong the well. seeing the build competitors. revenue our set revenue in last world next a can are Those stuff may of refresh. in with technologies platform around And is There the (XX:XX) rates running refresh. competitors of those other going of in going that's that lot in the see not the deferred build of a cloud-based the deferred the revenue

telecom around which which is that, that a is in factor in And addition great so our and is software cloud customers to very virtual the that. we're our what the support driven lot and partnerships on we've of and world major form cloud, doing moving extremely appliances strong some pure physical offering And players got by to the well defined like. growing

really environment, protect like that around the is Again, strong think some Internet it's proxies hunt And it's and in Broker, rates in some there that. CASB posting and say, we threats pretty growth by really our Cloud telling seeing very cloud had think acquisition, and now. they isolation, are reasons deliver is is happening me and to XX% the the conservative XX% telecom very a encrypted against impressive of that as Fireglass all these So companies front, being The out Access some we bright in to our threat more folks, delivered. spot very, and and that wins. right there's down I've some the do strong and sort of cryptography. reported encrypted, able there's And ratable

ownership is demand else infrastructure require cloud does put deploy, it, in. not It strong. proxy if which someone to means using and you're you is proxy running So still can

the for future designed refresh. demand that strong proxy, networks. that are and is delivery our And that business being see is ratable because and into do of in platform a we we the part excited So is there Again, alive we about well. are

It And so we are shift. mix mentioned that about as excited is I this an before, is not something issue. that

Operator

from And the is line one from our have got follow-up much, guys. Credit Zelnick for Securities Credit next and Thanks of Nick. Zelnick question Greg I've for (USA) LLC Suisse. Brad very Alan Brad - a Suisse

stronger think than year So I it's business, even the a of Greg, us any just ago. would've Consumer on imagined,

strength, would for value to opportunities? unlock you it out to up that partnership business and additional that shareholders spinning open consider Given

Gregory S. Clark

Equifax growth that very and Consumer tailwinds. outside very So is had you're the the strong seeing are I strong think breach right, business, of fixed. of It the influence a some that even definitely engine we is

in Also XXs, coming business. the the Day, quarters. you see the Financial that raising the prepared case talked about are and couple of as margins in there. we're and, our Analyst a we're well. piece the As of number integration. in ahead mentioned going last all they're that They're on at in the numbers And low I that And we're can for remarks, there's posting in we of we vectors such, ahead outlook on

I if cash piece was and was Symantec, we back a year in fixed. on had took is we go the So flow. overhang the digit big a it a double-digits and that high-single – at would what very declines look That we of

the at of that is. business now it growth forecasting are We in business rates strong that size

I mobile home Norton from work see a one a work we on even business, is we're your am focuses one good this. sets is. question and where in two is it doing in between the clean doing on it enterprise excited the as to we in, off, home would about work. really strong it and what a and the that it more but It spin definitely Enterprise, Consumer, much in have right safer organizations enterprise, process, now, people business we in And is than correlation think – as we we a like It to Moving Core and and world, that clean focus extremely is network.

the are so have we're industry what conversations excited doing about encouraging. that and very safety service about in in this, And digital provider are we also we

can what just proud can't that team shift and take deliver a be about deferred, Credit outcome. out to is recognized billion And ProxySG now what really impact rate, virtual you a you year, it the the to think - take more size that a business company opportunity, at you the that look shift different for of we that Alan that the expectation Brad when to Nick, relate should that Consumer partners us the and for we Securities virtual, I'm refresh how trade-off think threw helped (USA) situation. LLC Or a as Suisse that? the to then at and and to thinking look That's to revenue you remind that perhaps how for the gets And to after opportunity we so more and do Zelnick question, if and happy you about color. completely it Day very today, cloud adoption August, through? the take when, follow-up report we $X if way, back cloud as I'm about Analyst a and And in the us helpful if think we Joel's just last on be

Nicholas R. Noviello

laid engineering but I'd Day, we refresh those just side couple platforms a physical, showed out knew parity point all, between be model between on well. of before of delivery the general, that. could that Look, at perfect our first QX certainly as Day, Analyst the we of Financial the that and in a for that cloud difference actually that in say, Financial and in year virtual example hit the slides actually Analyst So last we the business

So be bit variability. of we as that think variability forms, customer goes saw as into We able a in case, we in-quarter year, of whichever of though, end expect to in to day, came little and this a forward, in and we've said mechanism versus little expected a be terms of help day, going expect deferred. of we want We to we that we in expected go we to forward. the a have bit At we to of the of be I to quarter end go able little bit at look have they want. it the this delivery this the variability business this couple at was and different what the

give which variability, year all I for There CFO could of actually $XXX have revenue, PKI into would we We forecast also helps say if out by move and commentary transparency you happens. it be our of a full built bit will full in more look you you transparency our towards ratable around Enterprise to that point, see little a and into guidance taking the on. you and that as deferred WSS at go itself. actually million always

pieces So from you you going on and non-GAAP. GAAP to have we'll quarter-after-quarter as of full there, what's including that all the show to transparency

that's So talked that half. But year about the refresh the be helpful. a for that built this I into view occurring. hope was We second would

relationships was products, to half. sales through the ramping front combined are we line, of be up top in indicated coming fact, going force and had that half, impacted up all In growth by be be bookings be to we business and in also revenue feel half first very that path. and them et with the on and the pass cetera, it. year on new second and good new that the about We'd would coming ramping the growth new channels, in integration. We We'd the

Operator

Stanley. our from next from is of the Morgan question Keith Weiss line And

Keith Eric Weiss

similar it for be? to I'm you how and really about Consumer loaded And longer become Zelnick, end was durable quickly we the the Equifax. from going to you actually I Equifax guys, a does saw, it my Starting one-two the normalized? is sorry, term that LifeLock try Or got out from all then we most that long the Fran it I'm it's guys going very shunted of the Obviously, subscriber colleague, impact off think to the going about Does free? after seemed on monitoring do impact? of term, was for give bounce LifeLock. impacts peter that the is more be front and equation, But to issue? Mr. there. you, guys it terms, taking like to or when like like you having six adds does that credit how think negligibly search spike not nice days away an happened, or really a to side got curve that that question. punch, breach. should out of came bullishly we kind talking Thank How

Gregory S. Clark

Equifax. was There on of So, questions, yeah, questions good ton Keith. a

of of impact and Equifax It results. towards end of results. the QX First the de It all in minimis stuff didn't the ratable those revenues. was quarter, the didn't QX impact that recognition the happened

case when of in also money cohort couple Digital the for into acquisition up it we our for we better were seeing it member doing what So we're and been or modeled in way. and them, offer number the much work a thoughts Norton bundle we've counts taking talking folks significant to more than remarks. LifeLock some value Equifax a saw we good, definitely up when went increased you, in would Safety in had about even proposition. with a the a just subscription details quarters uptake combined was I Norton prepared came for for of period the that But we

passion the if search terms when about saw look for people also searched they just LifeLock you in that think You at substantial identity.

brand Equifax, that's big protection that that for identity weeks big, we of new normal it that the the the strong in breaches do So is a think sustained beginning a different is than even some in was like following and very uptake at and strength it Anthem. later way other is there of but is more,

of dangerous on on was, also easy everybody through KRACK Wi-Fi the could So the When concept. the something about out vulnerability. to Wi-Fi traffic roaming happened, digital I power else vulnerability safety the how came which now that drives around to you talked access have think pretty and much

some they siphoning the and it Starbucks do knew spike a kid had be in software some sitting were how off VPN and to product you if we're your is could very The So communications. also very, powerful product, a is rates as a to substantial it's at growth very that year strong seeing a and well. $XX product $XX and that adder, in

it And Norton the market the products digital version one. other also conversion good, We've it in Core we then as realm won seeing announced we the a we're as is uptake of at year, very is safety Norton so had bring really Core, in the the And and good, the and well. some Norton in accolades. LifeLock lift the beginning

to introduction, and ramp really strong uptake anticipate starting that the So we're And we careful we're with now. there.

LifeLock. identity also many a very think other guns things. I credit. does if criminal of all recovery identity of remediation the the working already identity is it kinds and of of protection, that are happens other stolen, used theft, of ton also changing more at, tax to really kinds all people properties from other well you takes it's Credit for So such on LifeLock which licenses, guys so coming which than but good the various delivered have back have all time, care your the and just those bad then in buying of had and returns, address the they identities drivers' identity and And people registered still things, as name, that crime, your also

strong are for we better enough retentions, So say are that we adjusted at seeing and and more confident clip. but you to is now sustainably a business acquisition tell grow to seeing Consumer we uptake that can the we're I going believe

rates, we're And the PC better than talk away. declines so the all thought. distance business changing also knowledge growth. comments that that's from there, a Consumer of the And striking this we we're was on better base. the unit seeing and It's of what of there digit way on outlook our are And we're about that mid-single lot negative happening and we de-risking far analyst the put is we in together, really ago, guidance growth rightfully are year turnarounds And PC in within that. not and so a of accomplished proud information hoping we've one of my

Keith Eric Weiss

the want That's to understand of coming Got quarter. full of And, – on bridge just guidance guidance XXXX I coming sure this or super to out from the it. to helpful. guidance out quarter prior fully year the guidance, Nick, the make I the last

puts the there's and So takes.

put sheet have of to like back side $XX getting about out for million quarter. you half incremental guidance kind have well? an into upfront Blue from expectations equation well? revenue revenue in – assumption for Meaning there back balance you of of of license half as more impacted The coming divestiture that now ratable do benefit the adjusted back the some the added and in you versus on like got Coat as from taken ratable the this the the any sort You FX. Is your

Nicholas R. Noviello

we the Well, of entirety the year. more ratable into coming had

half/second in deferred the we of revenue first as million have showed in $XX up I balance terms QX So the sheet. that that on half, think

to strong activity track plan on business activity and We have guidance. business and

go into half, the feel have we strong We second we a pipeline. very, about as very good it. So very

ratable business be bit know recognition, In terms already variable can edges. of that ratable We on a that there's amount little the that here. happening or of significant a

of of be Security to things in through half appropriately those second Security a year. solutions, guide, types conscious PKI it that. And really for in We've tried March. half for of remember on and what taking before business, talked the the Website Website we're So there's we versus terms have out just to basis. have we that about the and that guide to in second month of the full-year no difference of you the November had But

basic the FX terms to the just guidance, a and little it through current divestiture there. of in rolling two guidance of prior terms pieces, is of pretty So in bit walking

Gregory S. Clark

makes good comment. Nick think I a

the Looking that. in to the support second big at second We've capacity support We to half, it. it. it's got a half. a understand got ramp pipe We've

We pipe. We transactions do a mix that. feel execute of to We in that have about good have of there. our good the ability to closure do

Integrated There is be working we're very because long-term the outlook, in platform especially up outlook but some driving confident Safety we up. there, what are Some the the about may deal large which Digital and to. are for definitely size is timing

Operator

question next Michael James. is the from Turits Raymond line of from And our

Michael Turits

quick in. if I Hey can squeeze ones guys. Two

First SEP and talked versions XX of all, the there. you about Greg, lot and new a ATP

So impact that the have what a rates second and/or and we if ASPs, question. see renewal any I on

Gregory S. Clark

question. Yeah, it's good a very

unified all, So come think were going to I is predictability a ago, like we these to EDR. first our and we year were, we just what I'd remind gaps we And converged said in doing. after that extremely of everybody important said in we're around endpoint

other some believe reached delivered around things deception footprint we SEP these some We there that flight we we work with parity completed actually with a have there piece very with that in point recorders. EDR and have as that. and one major blade XX.X feature well. And innovated of solutions of solid the and did more a we have now But

odd capability. We have now of X the deployments million EDR

footprint, hardened, believe installed that their if are is So and it huge specialize I a battle and is of folks that, at being past going that we look we that in bases you think some just already. the

we good And also around SEP propositions think strong really So AI we are We've do our was SEP malwares, in rates base. that in we even that have a signatures. we XX around, has delivered absolutely prior we the doing very turned periods conversion those XX.X. And rate extremely got our WannaCry, mentioned, I in XX as these than and capability been SEP a zero-day in it, are advanced see what no stopped before in that for well. do SEP XX we renewal value upsell acceptable in strong think installed leading less improvement detected SEP agent.

problem. innovate I'm product. we just months I it's of engineering testament that shut the to proof working gap XX in a really to behind So we capacity have down we've that got team. quality that. And and that the and that continue that We think that's with proud And again,

think that is really comes differentiated. them that in themselves and distinguishing industry, of researches threat set they're the with I

think to in So Endpoint. going well we're do I very

and going and the extremely, own iOS As Android. where large the vending lives. Mac extremely And of Internet products, one important. with is suite is Endpoint technology, that's including Mobile vendors to only goes Windows, Apple future the And become dark, across full our a we're Endpoint

we're well lot to the about Endpoint. super This we're a talent up I on space going serious think of so the haul. And we've there a set be very it. long is And on got and we're for

Michael Turits

adjusting Great. adjust quarter third even still pulling on follow-up two my on you think Thanks. for If still full-year, out for and in try that, to seems you was I year. it like pulling (X:XX:XX) pretty I months came for quarter months five for the out close Greg, for full below Nick. for but you're the then next

more we skew. this why my Is quarter math third it fourth as get it's a quarter if skew? do And if of So right? so, versus seems

Nicholas R. Noviello

on of there, say or you're terms things specific business, what overall Enterprise, talking Michael? In the about

Michael Turits

little bit... on numbers revenue. Total A Yeah.

Nicholas R. Noviello

Yeah. revenue? on numbers Total

So, first of all, PKI QX. that you Security for do have to and adjust Website in

out that and for month, in side overall basically. taking them business. are The of back the about expected for talking pretty we're to the much be revenues we half So one what leaving

there we're position of like ramp. we in half, not very QX, at for QX So Obviously, the type original the much in and look specific terms But year. never versus view really satisfied there's our second feel stream our revenue build-up the there. difference of strong of as gave the very we

a may have that you the down bit it. basically all for by million sorry, guidance pretty much Consumer the up, tweaked seen, of we've $XX amount by second Consumer. Enterprise the As overall year. That's done we revenue I'm inside the same the quarter basically to

to do. position, the on well supporting And side, fence. place. We So on we we're then, metrics the as the the planning for side the Enterprise pipeline consumer feel that in track capacity obviously, as what the like indicated, we've Greg got feel of sales

So we feel quite good about it.

Gregory S. Clark

Okay.

Operator

at do that time. showing we any Presenters, closing you And remarks? at I'm are have this time

Nate Pollack

your to just much. our joining you everybody forward I'd next thanks and to look like very support. for calls time. thank for I Thank And

Operator

second this the your call. We quarter thank concludes for Ladies and Symantec gentlemen, earnings participation. you

You may disconnect. now

Nate Pollack	Symantec Corp.
Gregory S. Clark	Symantec Corp.
Nicholas R. Noviello	Symantec Corp.
Sarah Hindlian	Macquarie Capital (NYSE:USA), Inc.
Saket Kalia	Barclays Capital, Inc.
Joel P. Fishbein	BTIG LLC
Brad Alan Zelnick	Credit Suisse Securities (USA) LLC
Keith Eric Weiss	Morgan Stanley & Co. LLC
Michael Turits	Raymond James & Associates, Inc.

Gen Digital (GEN) 1 Nov 172018 Q2 Earnings call transcript