NLOK - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Norton LifeLock's Second Quarter Fiscal 2020 Earnings Conference Call. [Operator Instructions]. Thank you. I would now like to hand the conference over to your speaker today, Ms. Cynthia Hiponia, Norton LifeLock Vice President of Investor Relations. begin. may you Ma'am,

Cynthia Hiponia

to Ian. discuss to year our posted call and results. you, page. events our on Speakers XXXX you call We've today's slides materials earnings to second the Investor I'm Thank Relations welcome web pleased for are to earnings -- and will our Great. Rick quarter Samir General and Kapuria, President Pilette, via Consumer Safety. Vice call CEO; replay Cyber This Cyber Norton available our Hill, Interim President on Executive be EVP Manager Vincent LifeLock's website. and and webcast of CFO; fiscal

as As condensed from consolidated certain and classified Symantec we from a of segment to changed discontinued operations Enterprise reminder, Broadcom in of operations consolidated presented. business of excluded thus our for -- name corporate to Enterprise connection with both and Norton continuing results operations the and sale Security XXXX, our are assets business periods LifeLock. of on The statements Security X, all November our were results

second acquired which segment. to solutions, Revenues now our segment. Starting in costs segment, reportable in in balance Enterprise Analytics associated were ID discontinued assets sold Security remaining sheet. quarter operate in we the as our in the our The operations are of formerly and and one included were liabilities included XXXX, fiscal Broadcom reportable of classified condensed consolidated

posted the definitions materials references metrics. metrics further non-GAAP, are non-GAAP supplemental stated. the website all refer financial everyone to like that to remind our I'd to unless otherwise Investor of Please for on Relations

on taken financial our with financial measures operating measures, regarding and reasons press below. non-GAAP of believe to are referenced comparable information meaningful Please supplemental our measures, GAAP together reconciled when our We release financial supplemental financial presentation this call for GAAP the website. performance non-GAAP measures corresponding discussed provides note, materials posted during in their

non-GAAP in forecasting financial presented measures. financial should considered GAAP. financial in uses periods. We prior team management investors to non-GAAP planning information and our measures and and results believe these that facilitate as our comparisons periods financial future be as of well operating for when Non-GAAP assessing performance understanding measures our measures a financial our substitute accordance also Our with as are non-GAAP supplemental benefit from not

contains call date, see. based current involve and on statements forward-looking such, statements the expectations. uncertainties we conditions Today's and of expectations, results Those as from current currently that beliefs, based only on to our current as risks materially are differ cause speak actual may and assumptions

benefits reductions release press assets cautionary and statements In any particular, this to anticipated a Security such for subject transaction risks. information. of to more Broadcom, Please Enterprise refer variety our from the sale statement in of the regarding our to our cost sale associated with are our

filings factors our with fiscal March You our detailed SEC will annual in about Form XX-Q. in XX, discussion a risk recently in particular, and also the Form quarterly for reports our the ended filed on XXXX, on and, report find XX-K

Let to turn call me Rick. the now over

Richard Hill

quite a thank assets another us closed have week, news $XX.X billion. Earlier Broadcom this of of inning, you bit afternoon. this Thank to joining all for It's you, Security and Enterprise today. been and Cynthia, sale good exciting discuss our of to we the for we

now our close of Cyber Consumer company are LifeLock, transaction, ticker new and NLOK. under in With have Safety, of we the Norton trading a leader changed this are global name now the and we

to quite quarter say been a busy it's So least. the

Board The commitment drive Board has what on proud Consumer entire to and unlock X in to our Safety. Security the delivered team has and value in management of accomplished is The this Enterprise quarters. Cyber

team LifeLock of the approved heartbeat. coupled company end the Kapuria growth stranded give that our in miss of most Dr. the has X high the position Norton Samir But business. announce Board seasoned are They and LifeLock over These and and Norton new to what and team revenue Vincent promotion the our proud in QX provide for Norton met The we're I'm of believe in CTO, President. with world-class of continuity promotion industry elimination management the can we addition, the deliver Pilette renowned business. to leaders, leadership will QX, who both Hugh the In well-respected to Board and for LifeLock in CEO Thompson, costs not EPS. of a guidance is I guidance of a the

a consumer and operational understanding capabilities of financial discipline, while even and in-depth and customer as of of threats skills. provides Hugh the history brings know well deep the as brings of yet. consumer Dr. what understanding a Vincent doesn't vision the about consumers business, needs Samir operational of the vision fluency threats natural Thompson leadership today's

downward-facing be have addition, the search step to to that highlights business hit we and located the Norton Tempe, let LifeLock before as new dog, In roles. for for Vincent we of asked I Norton to in this right will Brown Samir LifeLock, But and Hawaii pinch Matt in as key and new the summarize put as Arizona. return CFO CFO track their CFO a that on me

we of an has First, business going one tremendous and sight the and for he individual consumer high gained leader. the operating a the for both jobs. line identification greatest He natural recommendations. strategy has and to unrelenting business and He as team Broadcom, of He elimination a consumer architected executed my has who at and Logitech. as of has consumer Vincent drive costs identified He consumer results feel tech recruited the on stranded Enterprise skills be I a I CFO of forward. sale team has experience. and of and transition believe is honed the an and has both CEO respect will

has Schulman for addition, a consumer $X.X to worked size restructure with In billion more business. appropriate Board to itself our Dan

thank step of the down As at the elimination all will costs. Anita to Fuller Rick David selflessly Hill, announced stepped Meeting. today, Annual members Dan who XXXX, accelerate help Dale Suzanne Mahoney December the Vautrinot, Schulman, down stranded Board to XX, I'd like of Sands, and

Feld, Humphrey, Dangeard, add the we select sight line deliver and Annual and additional Nora shown be Peter to team, Chairman assets the their days, and the Vincent Denzel, will the Barsamian. Meeting. Hao, thank And my the last spoke for than we employees at to call. Enterprise transaction support Personally, the over would the to and on X innings will you Unruh $XX.X August Board, on Ken Pilette X results the Frank Remaining for investors, we Monday, at Board new sale members, At our the the Meeting, Annual Vincent billion. like Board David On Paul will I our Susan of you, have Security better XX mound. the for on closed Broadcom about of has conference identified management me

$X.X negotiating Our lower, cost down the prowess his and of through are $XXX million. remove estimated down billion annualized to cash the to from $X.X stranded Vincent team. these costs from billion billion, also $X are now And costs stranded

distributed total with the relief approximately of perspective shareholders And we fund assets, believe we We that, pitcher. from maintain to home special to $X.X the We dividend. on of have investment early with and can proceeds received XXX% from in once of self-fund our billion. after-tax we is billion of announced dividend This a of October, the the sale are last from run made the $X.X real that our we in the all sale million. DigiCert commitment When expect and would and of had In funds costs declared $XX and also earnings transaction stated a estate $XXX the or be proceeds over this equity we of this majority the the form a call, return assets. repatriated. now that of these QX monetized commitment proceeds combined deal fiscal the underutilized underutilized reiterate our our to sale cash we

you the our in divestiture with dedication EPS an of company the in fully above and focus diluted our in and be have actions roles. of new company results the focus Safety Security the X, began revenue. and to Security I to I revenue, for in-line optimized grew our and both safety commitment were Matt restructuring Hugh our given more for guidance into we Enterprise to cannot their Samir, thank this over cyber Vincent, completing margin doing total and their cost time on what last year-over-year. want for is employees we proud as to required Cyber company of in step team, order with confidence Both they with a structure. and quarter Consumer stand-alone full leadership several I for ranges, accomplishment we amount to transition results the months. total operating and we big This say, guidance line delivered a Enterprise Reiterating resources and

the downward-facing dog, leave for mound review serious I and then let the to more turn the room go-forward call over details in some our me on and as will Vincent, Hawaii who results our discuss plans. locker Vincent? for Now to

Vincent Pilette

Rick. behalf that of thank many perfect provided. teamwork, this thank can brought leadership great important, tackle the leadership an like we quarter example challenges. and believe this to the that while Rick. through surmountable to within and things of magnitude I he Rick would his execution us There partnership. you, On asset for deal the good company seemingly Thank Closing everyone, is and made one are most company. running you, he Rick The of

Richard Hill

Thank you.

Vincent Pilette

are repeating billion, an of to billion sale of $XXX $XXX are is stranded over be now stranded Monday. at are Although costs estimated business from Rick highlights, multiple eliminated months it cost to already primarily next to be estate is the down be planned of XX now sales The The $X.X sold and real campuses by for to The million $X.X shared other expected cash than that our estimated sales closed year. billion. are for more cost them. assets, estimated The on of of million. mid Enterprise be comprised some funded costs by expected key $XX.X of annualized and worth cash

new cost Arizona better, start delivered company even X% We for revenue. operating as structure our decrease launched headcount. reflected sequential rightsize proudly And designated as LifeLock margin. we and in in our headquarters. better-than-expected QX to We already our delivered new commitment name, our on Norton Tempe, We our

and there of as vibrant QX promise. by company, CEO to We a named have Today, transform no pure-play. promoted demonstrated that talented into the our a Chief Officer, us deliver to Interim a achievements, on our current we Samir and build front Accounting is better I've Kapuria as has as have of accepted consumer been consumer team President, we lot to in Brown, and role of CFO. Matt work

at the to We CFO closely Tempe. for Hugh a with permanent have look I and everyone be company. also new search partnering Matt launched to in forward and Samir, a

this was of QX, As financials. responsibilities, the In will into business QX operations. my we CFO quarter review Security the under moved I discontinued Enterprise majority our

me structure, discontinued operations. While we reporting on included a for results change and our to both the to would of it's had provided non-GAAP to which view you continuing we give as guidance our X, have compared August important

exceeding to XX%, guidance XX% of $X.XX $X.XXX Total exceeding of points company Operating line Consumer XX.X% was year-over-year. margin QX margin $XXX Consumer And $X.XX million. $XXX with revenue guidance. our and XX% diluted XXX Enterprise margin basis with EPS year-over-year revenue, segment was Fully revenue was up and was XX.X%. billion, year-over-year, flat to Enterprise of $X.XX, in segment and of guidance million. up XX.X%,

under discontinued As mentioned, the moved operations. our majority segment of Security Enterprise

the constant formerly in currency. and business, under year-over-year segment ID now contributed our Security quarter, was structure, So included costs revenue new revenue. Enterprise includes the operations which our continuing and QX operations Analytics which million, revenue our reporting $XX Continuing in flat to in $XXX million second was from from

and our our Consumer $XXX target burdened operations cost in costs, in QX costs was our Therefore, $XX months, $XXX $XXX million accounting to line track. related our Safety P&L approximately business was in While be reported in reporting sold for equates continued requirements, margin, operating of Due complex with business and remaining structure to to reported costs operating Cyber remains XX multiple in Under with equals $XXX continuing P&L. and is goods QX. to our to total in million, stranded places core model. approximately XX% million located operations, spend, approximately will in stranded cost that we the on consumer in the million stranded which expenses, Spend million related our spend. next

will Some will be in continued be in some operations, discontinued in be will restructuring. and some operations,

changes. and to in to that We I is we want times better will XX possible structure, to detailed we I give through much possible accountable overcommunicate months. you confidence visibility costs. as it plans that these I've as remove leave be with stranded eliminate as have costs transition my directly next this career within as during visibility you it soon cost stranded of as call will learned these place. are that the full our to

our cash Monday, maturities flow the with ended of debt cash to $X.XX as from free shorter communicated. million refinancing with at million. On unchanged level billion. we investment QX, our $XXX extend announced cash billion, In We total flow operations of was of successful upcoming and previously second a $XXX debt $X.X with our quarter

we Consumer for Before Consumer growth vigor that the I a our to direct business, have membership a marketing to acquisition mid-single-digit with to pass business QX, solidify long to on we Norton investment, at we marketing the more our on details highlight renewed targeted XXX primarily growth our business offerings. I Samir the In objective the on plan programs it increased over to revenue term. sole focus return as in the want focused fact

Although some equivalent the take of business, billings it due X%, growth the of business. consumer, -- bookings to sign early due potential of to time to in will the line nature is to an reported revenue to subscription of the revenue to flow line growth that growth the encouraging flow

will me QX let Samir, do call to who turn deeper on now dive And consumer over the a results.

Samir Kapuria

dark of consumers. countries XXX Asia Vincent. us our value safety monitoring launched online you, Spain, broader a Pacific different U.K. XXX and EMEA protection, cyber In second offering quarter, plans third Canada, we In coverage and Thank Norton EMEA expanded The privacy This allows Japan. memberships X identity increase Latin additional the products including of in membership enablement, In U.S., the quarter, web protection. to and and APJ, and in memberships in offer further we our device of countries April, Scandinavian levels strategy to are Germany. Norton set and America. the we by targeting membership

the stabilization second year-over-year. which sequentially were quarter, customer million, in ending count the we direct In XX.X saw X% down of declines of flat our and

Over in quarters, increased our to program order spending ARPU, revenue X% we've longer-term X up direct user, month, Average growth acquisition the $X.XX our marketing X% to capture opportunities. in last customer year-over-year. per sequentially increased and per or

revenue the We also protect millions our X% quarter, of was partnership up In indirect second users year-over-year. through our partner relationships.

strategy all that lives. Cyber protect online Safety areas foundation of is The solutions of our consumers' Consumer to offer will

acquisition forward, Our Safety Consumer operational offerings devices, industry a And identity, LifeLock home innovation. an cover LifeLock, singular excellence continue and with in Norton and We going leader family. privacy created be the focus, Cyber category will to of as with XXXX. through and the we

I'm everyone expanding market. partnering constantly concern provide team safety cyber is identifying risk an Cyber for an is expanding ways safety. to and cyber ever-increasing and with globally, to new forward together, Vincent, looking to our

Vincent Pilette

Thanks, Samir.

the outlook QX our revenue million to year-over-year. quarter, in to or also of down flat third range turn allocation the now expect me In we and million plan. to $XXX X% our discuss Let capital $XXX

drive for expected other ultimately continue growth, in growth is business to to in QX, low the growth yield to single-digit continue will quarters. bookings expected delivering which We revenue

flat of timing our have the plan today, the and scope costs. $X.XX made about our of our can more we core rest share profit margin the make forecast transition sequentially, be expect business Broadcom the of quarterly we spend $X.XX on and assumption to QX agreements as The stranded continuing operating next non-GAAP share range of well with at EPS count dynamic. on months as the of XX% the the treatment and and stranded elimination the restructuring Based service based a the with breakdown of in for costs, complicated operations to our per of few plans, accounting spend for approximately

significantly providing EPS GAAP assets, in guidance the could Enterprise not more Security to QX $X QX. sales are EPS GAAP gain $X from of in due We charges, extraordinary which our yield resulting the to

quarter today's next the for manage our we activities, actually we eyes objectives. towards guidance our XX-month provide business have we While the business and on

Upon that share to to the approximately So we reach stranded Broadcom buyback months, the operating expect the XX of benefit all come services within full to to stranded $X.XX. year from support the and company of the program, we me margin will eliminate costs. and a the elimination let reiterate of XX% a annualized transition completion costs, next EPS

While I forecast, you annual it against continue to give that goal, determine which quarterly $X.XX, is by progress will success. our we

shareholders in special dividend, to and Today, would X% share his committed the that comments. XXX% we dividend to the At after special As quarter in form management all announced this we quarter, $XX over mentioned Board last of proceeds $X.XXX raised declared current Board of today's the after-tax annual our price, equate to returning per in The quarterly in as also should regular dividend share $X.X are the fiscal repatriated. be of paid we are XX% fourth the and billion quarter. Rick funds approximately by this the by to yield. announced team

dividend this equate Excluding yield. would the special share from over annual X% the price, to

Finally, repurchase we existing execute $X.X an authorization, transition which the billion as period. a we share have expect reminder, through to

transformation. This comments this Let accepted why with following business few a operations me on a leadership we rightsize the divestiture. one must Enterprise finish role. our On is major side, I've

make other the continue world we the safer side, cyber to On to for have place Norton to a expand LifeLock everyone.

cost we the assets. business, billion to to $X.X We eliminate. unused and monetize of On of need have rightsizing dispose

We down cash proceeds costs to related operations. for the will fund to the assets winding use those stranded

new Norton outside XXX of the subscribers, and structure partner on adoption direct and our the to initiatives, as memberships, the of and products us subscribers expansion development cost such of growth functionalities. U.S. many the fund of conversion new the side, execution other optimization the will to enable On the our focus

team continue of Safety all and will operational excellence, consumer as Going to employees to It in emerge me Samir, is with safety. levels. vision company drive Consumer our discipline to to forward, cyber executive partner privilege new a Cyber this for successful a and

questions. to Samir happy And any those turn you. are now I'll it to back I comments, take with Rick, and Ian,

Operator

[Operator Instructions].

Our first Saket question is the of from line Barclays. from Kalia

Saket Kalia

Vincent, Samir, on respective transitions. your congrats Rick,

Vincent Pilette

Thank you.

Samir Kapuria

Thank you.

Saket Kalia

And Samir, talked Can you you, talk account? sort core little subscribers on LifeLock Norton we Can just betas give us stabilizing. you that about how customer direct forward? going of of the direct for sense count about for trending? respective Samir, it's customer just the maybe a bit you and maybe business. Vincent are First, about think how and a both just how

Vincent Pilette

Yes.

give can I So the question. first

First of quarter, we into in some marketing programs. were the use new last marketing primarily all, to as to we back said those the investments, started savings and acquiring to targeted at of direct customers pull

years, about For and we the couldn't are last for this want, XX.X XXXX. few Equifax I you achieved stable of you find in exclude the quarter, stabilizing a view, that. if such million if in event the quarter-over-quarter process subscribers

viewed this I a And positive so think is very as momentum.

out, We their membership into membership of you I that to you as would know, now functionalities. primary subscribing. what towards form privacy and Many them, trying are the security add protection with a get are if Norton we're messages, the for view different say get don't want, that program, of of you and identity move versus and break course, the LifeLock, or where But package membership. consumer marketing

do trend want that's anything? add you we've seen. Samir, So to the

Samir Kapuria

pretty well. covered Vincent it think I

in a mentioned that the conversion increase we X% that's users programs. safety ARPU, opening reflected you're year-over-year, into think our and cyber indicator membership I in is in our seeing our of the other remarks

Saket Kalia

they Vincent, deeper is, Thanks, the discontinued go versus very $X.X system should follow-up XX we you've out it guess and can talked in some about That's question of and the breaking reductions sort about stranded cadence those away the my in removed Got And months? partially we of that on over get how would away of know helpful. could big XX but costs. on those just the little steadily Maybe others? stranded those you, see those thinking next for it. just Or the going the a profile for months, into billion or costs ops. next Anything you costs? going be over the quarters just I I big on the by from helpful. way, for be

Vincent Pilette

absolutely. No,

I the operational that. very of GAAP with want we and on and activities cost. or the counted to to I driven have Now geography on tell all we're is have do whether visibility. operation, The rid how you, plan discounted the restructuring, by providing good But the P&L, the detailed get to the it's nothing rules. a operation activity, therefore, really accounting

is possible As including we areas. unused -- cost, as X write One them at X if or costs to our big stranded we quarter some assets. the try spike of we projection, least up a the and in our and we to be as to it's made know, in you eliminated. as in of which, needs kept next soon position service really is people eliminate months will for will QX as guidance, After be This the want, you position have Broadcom, bucket off them.

The bucket we be X positions eliminated. are facilities, buildings last renegotiated are exiting and is being we are other the writing will months. off. contracts the either assets as is over one and that And or That next second

QX coming down biggest be the this will little be will to So it bit I move quarter, probably it quarter expect from choppy. a there. then and

I costs. for cash investors, the of last would those good think item we the will versus provide piece mention noncash view stranded a I of

of I what deal. the matter that's value the in think

Operator

next questions Boolani our the from from line of Fatima And are UBS.

Fatima Boolani

new I ID into you dig all in to Analytics roles. Congratulations business. the the to wanted

the rest for us you benefit a at And sort have of model give revenue us, then is are we And an distinct portfolio. the just can business Just of consumer looking exactly of if overview what Samir. of for I the how what follow-up of this is, from it here? all

Vincent Pilette

last you annual know and services. obviously business is want number. ID today, Samir, quarter, to $XX add for don't the $XX The a fraud business alert anything. broke $XX So provides services if some million an and I it's million. about I it million, alert

Samir Kapuria

areas, is is rich the sources monitoring and X IDA is on enterprise data very Predominantly, focused Yes. those sources, monitoring. and customers. fraud enable And multiple our data to credit for both business model

Fatima Boolani

Fair in appreciate translate ton I'm geographies. been expanding presence there's a progress Samir, about your And if that. on wondering into discussion international in can that ARPU of impact. U.S. you growth enough. I your opportunities, made ex

I think, we're ARPU typically, markets. seeing used to international some degradation in

So advance? any speak of any ARPU elasticity regions to of That from you in be perspective super can you divergence sort would as signs or an price non-U.S. helpful.

Samir Kapuria

Yes, given where -- that's a great question. Thanks for that.

Given premium our we're similar brand our on premium products, existing been international full offering has countries -- mentioned, with a expansion the ability ARPU take focus being countries I the cyber in of targeting safety have our at levels. initial to and the that

Operator

our question from Stanley. of from is Franchi next line the Melissa And Morgan

Melissa Franchi

membership. the feel sort And then see in that should continue Weiss. cyber wondering for forward, if roles factors to sequential drove detail greater I know you adoption sequential Samir, of of that bit Congrats, ARPU sustainable and wanted on dig in growth as you do of ARPU. dialing everyone, to the But I we the in sequential subscription those mentioned trends more in that. increase just premium looking the a the I'm Great. like get new the on are growth? a Keith well. any to safety onetime kind and was there little

Samir Kapuria

Yes.

that see rollout that I'd and the customers, recognizing programs, X% program. well. year-over-year we're roll customer that of existing the we our that that going reflective anticipate customers, new out as is we both reflect to cyber well base through of to our we're as new continue acquire in as ARPU ARPU As penetrate markets more safety as new

Melissa Franchi

just And follow That's wanted I distribution. on up Okay. to then helpful.

any form about of, going moving I if spend should any other updated OEM partnerships increased And partnerships? we Is in on direct or forward? You that customer revisit specifically, how there mentioned guess, we're think acquisition. distribution, or view to relationships

Vincent Pilette

Hey, Melissa, is this Vincent.

started operational a business. kind And our opportunities, yes, designed of So Consumer of we've if we you weekly matrix want. with review

customer form other, of did one when at And products the underfunded of the about look and first on channels. distributions. to to increase the access had frankly, a and and, direct that want past, opportunities. doing great program we because matrix, those membership lot in We now we Our have both our distribution products into various and it's marketing been in feel the our some acquisition in axis, new we that of on investing

Operator

the from Deutsche our Karl question is And Keirstead Bank. next from of line

Karl Keirstead

$X.XX I flow. about path and time. same Maybe to questions cash just in got free EPS ask $XXX in million the I'll the questions both at

So $X.XX I business you at running about we months expressing the Consumer good $X.XX. EPS X of that annualized were was an ago, the think because essentially should feel

much is that EPS $X.XX. just So to ask missed of to it can leap presentations, wanted really it $X.XX. wasn't most this a in to to I was get the what but recent annualized close in quarter Maybe the I it Consumer the for we so how see

sight side, think at you can free combined cash of only better the that flow about to million least And $XXX "consumer number. you're free cash the flow. free line on free consumer $XXX talk million don't secondly, disclosing can bit cash little qualitatively, about cash we I the flow, of perhaps then a flow," feel so But

Vincent Pilette

No, both report of the we view. I you consumer -- current will all a continued all will absolutely. now know, have segment moving operations, stranded combined business will as forward, not costs. we plus reporting And

that and as the other can of cannot GAAP per there we things information So those. rules. are additional we follow And or course, we break SEC

assumption at guidance the last which quarter. at profit If both today consumer delivering our operate that at you the $X.XX. a you I you still We the tax would margin, than time that. it's use be the and operating the XX% business, you're the said current was in had look cost if around And share of count different rate, XX%. not and today, consumer capital, business

yet have program. the not share We started buyback

that Eliminating the end is period. of part to to count so relatively transition of XX-month that and reducing number. the share the and close are So will by stranded continued operations as us the cost that very $X.XX flat, count we share lead

margin, profit that million mentioned this consumer which for we as generation, cash free I On the August. cash year, almost there. roughly, are operate flow change the at No is best because we level, the business operating $XXX XX% your proxy side, at in

Operator

our question Mizuho. Gregg from line the And from of Moskowitz next is

Gregg Moskowitz

Congratulations on at confidence historically, additional will if I quarter. was such to the in this that you guess that mid-single alluded grew that question, catalyze you billings would consumer digits what I And company? well. all for X% grown this a gives as could the good incremental wondering investments hasn't realize drive quite ROI you elaborate part my to could sustainable level. And Vincent, growth first I But basis. that year-over-year business on as what you that, of growth achieve a the your marketing

Vincent Pilette

Yes.

if run billing look profit. it's the I and was the pieces savings but operational was X% at the solely would say the not moving business reviews some since growth we maximize few reported. as we there. you booking single-digit reported. deep, activities, today, weekly we to first And started The really the last we've opportunities, flat to focused growth In only with There's incremental quarter developing growth, negative, we profit. maximizing growth. just So marketing have we on not it a Samir, and is of as into mentioned reinvested August, you on low X as quarters,

that opportunity terms of only addressed few fully to XX mentioned you those XX our XXX-cell have I of sell top today membership, as opportunity. again, distribution, a full like, matrix, in X and And metric, are and our to

to into and of our savings those efficiencies those. see to And continue redirect so operational improve a we lot opportunity

term, short will the Some direct like customer little be acquisition. a bit

build blanket, longer, into Some the will longer want. you Consumer And to invest is of term. be vision longer Safety term and Cyber if the huge

we that's are. So where

-- will it's because the roll digit the four will a P&L. single quarters bookings, Today, P&L the if suffered low take four subscription through about at take growth quarters business, to of Bookings you from weak want. last

And just take so it to solve will that. time

So that's our current position.

Gregg Moskowitz

the over might of costs helpful. we've and special as address balance clear, to next very real as the briefly what like, I some getting level That's XX then very the linearity And X of investments. the and the to sale but and well sources purchases could linearity look uses other of any then estate also cash might primary changes months, sheet share may also Okay. stranded incremental you just inclusive of any whether are be on dividend, helpful please be of debt forma pro perhaps if think there it and been questions the

Vincent Pilette

can views I here a few of you uses Yes. and sources on give cash.

First of $X conservative to costs current The remind have of that of million and stranded projections lower in received cash $XXX make that our coming tax assumption lower. up we the August, want sales line our just are underutilized all, and portion keep only from too. of going compared I sure our why we as versus forecast billion you we to in proceeds to is want assets sight, assumed, are

the pay In first quarter, we'll $XX dividend. the

timing. So one for that's

the in point at an systemic that transition it opportunistic. We have have assumption We both we'll buyback $X.X to time and through the this use share billion want period.

depending So on we act that here. through see differently where may we it,

for say kind next year. the others, of, the I estate our mid put assets of in year. why the of in forecast the sales real lack of For we better knowledge, them middle and That's of model, the

Operator

next question Crédit Suisse. our Zelnick is Brad And the of from line from

Brad Zelnick

Congrats business. understand just reallocated follow-up for of guidance much that was you of factored what's and And Consumer a into ID to confirm question Analytics. I've to want how your And can profile all. the hoping million quarter wanted Enterprise ID clarify. to margin and the got from follow Samir. The for Analytics on Fatima's benefited in $XX revenue that up from I just and just to being

Vincent Pilette

Yes.

So we quarter, revenue. million in $XX the about of have

our meeting are guidance for We consumer.

know, We we $XXX of end guidance for into old Enterprise delivered guided $XXX a Consumer our which low and structure, consumer, you guided the an the we million. segment. is million. segment And As

profile, terms sell the In don't that's a the They but really margin, double-digit to margin of have consumer the margin. business that profit Enterprise. the

Brad Zelnick

with when And think to spoke asked. and But anything, LifeLock? a and Fatima if operationally just, Samir, recombining Analytics just this ID in what, bringing back you strategically, I bit home changes

Vincent Pilette

buying want sure not taking that to so the grouping and coming that. in of the we that. were consumer it, is Enterprise and back that's business we make result into Hey, understand ID I what Analytics Broadcom more

Samir Kapuria

go-to-market that's market Enterprise side that's on Consumer play. that the a line focused It Yes. the part of is think summary there. of the not And separate I the is right

Operator

question next Talanian from our is of And ISI. line Ken the from Evercore

Kenneth Talanian

for could your rates where give might I going a retention sense us if forward. trend was wondering you

in to in them? over programs any improvement help might good seen years. You've improve And there the place that

Vincent Pilette

through basis. did of deep do into useful things, we're growth forecast with be opportunities. added So disclose a We now for We're as we XX.X% so improving the consumer, stable. identity reported flat of last privacy investors quarterly the the any any to not metrics to couple expect future. for Samir. Definitely, and protection, of retention we were giving base, which or the either the have you those retention They a we and more I'll it retention reviewing pass obviously dive engagement user protection, that that continue on still will to for operational number But the membership, the The opportunities of increase adoption quarter a the rates. company more most rate rates. not value

Samir Kapuria

Yes.

Our focus and on in relationship customers, platform those we that and customer around have a privacy, strategy safety as And home And we cyber with essence, our with we activating centered relationship engage identity, to complete family. and greater the with the of all upgrading become our that's, levels is them. base stickier across security, have.

Kenneth Talanian

have existing of a us your bundle? LifeLock And follow-up. or sense Norton base you and a percentage otherwise give Great. of maybe guess I as what Could on a both

Samir Kapuria

a subscribers existing a have into can with have Safety Yes. by we the look XXXX. We of LifeLock acquisition as And lot then, into model our we breakout ahead, not of Consumer the have platform upgrade Cyber each cohort. of that But we that launched customers Cyber and we since opportunity upsell provided we still Safety in platform.

Operator

And our next Rycko line is of question from Jacek Citi. the from

Walter Pritchard

Jacek. questions. It's with Walter Pritchard Two here

and will that the see from on the the come proceeds the side. with just understand the much to estate how Vincent, you help there broad real ranges outcomes you how us, risk Could First, real estate?

Vincent Pilette

you So And campuses of had we we'll estimated. X At So mentioned? the to we If $X get to sales. point you this that we'll in wanted have possible. an price try give majority or the it time, update, billion we put already the we the it's X you. best range, for

Walter Pritchard

modest And opportunities and that investments sort then putting either cybersecurity tuck-in back about as the you're the strategy? you're for suite, business into of full thinking how or would aiming deals larger that this along that about help are tight you thinking acquisitions

Vincent Pilette

Yes.

have That next savings really right our to executing any ruling The today, on returns. we eliminating Consumer our to the immediate operational we're -- the opportunities drive position. tuck-in have cadence, driving for muscles on more the most return add we're to we focusing first building shift that to the overall, acquisitions, subscribers want of always direct I profit we operational marketing And of budget have maximizing more can R&D, would trade-off going the growth efficiencies, increase the more we products. time, plans, redirecting building unique business our as some growth as and R&D is a right We the not add into a to costs, from overall investment say operational the really the or view function thing we're we with at our offerings. the So and the as because out those really when then into on programs. or a to do on was either stranded to felt to organic growth. in was focusing urgent investment

Operator

from And Colville line our Research. next Patrick of from the question Arete is

Patrick Colville

congratulations quick on divestiture Vince, a $XXX investments. What's that? the I Can slides mentioned you cost the the equity of a savings? appointment. question in from million benefit ask So on

Vincent Pilette

a that So into we October. minority a sold had stake DigiCert, in business, was

Patrick Colville

top on given decline rising this got like quarter that trends midpoint, of quarter up, custom count a sequential guidance kind inflection. the and at next for and look for then number. your And the guidance you Understood. which quarter very just flat look Okay. the line to picking how the to kind quarter but implies Because the of are ASPs, downward this suggests next positive understand things then X%

be So you any great. provide color there would could

Vincent Pilette

absolutely. Yes,

coming a subscription minority quarter revenue. is a a subscription balance is sheet business, this right, revenue revenues those period bookings in the from and business, in XX-month the off lot So the a revenue the coming of off of from where rolling

the from a you revenue. at a extra the X revenue quarter, the excluding growth. coming And last decline, booking If growth bookings negative for the negative prior quarters, quarters' impacting they last had those week the look currently, is

in transition take And flush through will marketing. a secondly, adjustment, It metric which be and margin, this want. if period, in operating in count, able business, that digits. more the as balance will forward-looking XX% the the stabilization we single should I after as is low growth, of and we the to to was single sheet the bookings invest few direct following growing same mentioned And we forecast customer continue quarters you $X.XX to quarter, that be positive quarter. for digit that mentioned, a the which you As low continue delivering

Operator

have we other no time, showing I'd to back at Vincent closing for that And I'm this remarks. turn questions. like to it

Vincent Pilette

We'll call. our best much. to would you. with like you appreciate I update continue our do the that, you on close Thank attending the And to progress. call. very Thank you to I

Operator

participation. concludes your today's this conference. gentlemen, you and Thank for Ladies

disconnect. now may You

Gen Digital (GEN) 7 Nov 192020 Q2 Earnings call transcript