NLOK - Earnings call transcript Q2 2022

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Operator

Good afternoon, everyone. Thank you for standing by. My name is Jerome, and I will be your conference Operator today. I would like to welcome everyone to that NortonLifeLock Fiscal 2022 Second Quarter Earnings Call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After will opening to Ms. At for I now to this time, over remarks, like call pass the Lai, Relations. of Mary Head Investor Miss, begin. you may

Mary Lai

and NortonLifeLock Darrell Thank Welcome afternoon, Quarter call. Second to you, earnings fiscal good XXXX everyone.

our review CEO results are to and today Vincent Jersey Nally me QX Joining CFO. Pilette,

nortonlifelock.com. references to metrics. IR in are non-GAAP remind and non-GAAP there A growth our website which earnings all with to unless that will reminder, and investor. on of Press of our materials a year-over-year, call, otherwise along the our final a replay all to available reconciliation this included metrics press website release, rates IR I'd call during is this As are is be posted everyone release, defining GAAP measures non-GAAP on like the stated. the slides, at

of document previously only shared in has business, we our may ongoing beliefs, the cause the differ statements business regarding our today announced pandemic deal. of with industry, our considered our of operations, current expectations our current that the current as the and from speak Today's such call the are materially be financial the impact COVID-XX statements addition, on forward-looking assumptions, actual statements already and limited involve will which based uncertainties information contains including In on and and date. to what statements risks be may results Those and expectations. and published in website to merger and Avast. connection performance, The disclosed on been NortonLifeLock

And our particular, with the I to statement report Vincent. will the the over our in Form our risk XX-K year CEO. Xnd, the the SEC. turn more For factors press our cautionary XXXX. in April to release ended refer annual fiscal for now on call And information, and filings in please

Vincent Pilette

Company focused, became since Thank come We've exactly today. a you, way consumer good and Welcome ago a long X standalone Mary. we years afternoon, everyone.

I within our extremely transformation, on this and proud to committed operating discipline reflect delivered. financial bringing we to NortonLifeLock's meaningful of As have and growth I'm and business team. We sustainable

been track building our remain and long-term meeting a relentlessly have objectives. We record focused strong on

focused me experience, long-term improving our by share scaling putting safety before, trust-based our cyber you've growth goals of innovation security we we first accelerating platform, executing the are digital are to heard from By on to integrated driving relentlessly and believe As solutions. customer our product reach. our our customers core base plan, within and

and up solid working, QX another and high revenue of in single-digit bookings. growth, as delivered Our we quarter strategy consistent was is XX% with growth

almost We and continued year-over-year. strong up expansion, profitability are XX% EPS delivering

year is Our high with line single-digit demand of being The activities. fiscal of other to bookings our as start objectives half and seasonality, historically long-term of reflective first our and in to by lower. COVID our mobilized seasonally prioritized was or travel QX growth summer impacted was weaker and more people the normal expected reopening

quarter of of strong we straight adds direct delivering metrics net the finished As investment, our quarter we our with all balanced customer momentum, operational sequentially. Xth and

lead growing Our QX, In we of retention XX.X to represented business, the our count direct-to-consumer ARPU XXX,XXX million which direct bringing quarter-over-quarter, count majority added up slightly total customer and year-over-year, over stable. and was X.X grew customers million. with sequentially X% customer revenue, our over our new

we and on portfolio our higher have driving robust more more a while as global customers. reach a product engagement existing richer build We to continued with consumers basis,

their mind as low year to improve continues digital experience they to customers providing Score quarter, lives. and to XX customer from Promoter live Net XXs our focus Our of reflecting this last on peace our

continued efforts in to last similar double-digits, quarter. expansion QX international Our grew and

ability component encouraged consumer to expansion countries that value idea our a Asia. We than now model we web are elements where into Europe more as success we across with internationally [Indiscernible] of identity reach awareness. our advisor XX to our critical our the is to invest had increases nascent it and in provide in It combined available And continued is and the customers more Japan, we've dark with our U.S. of monitoring outside replicating restoration. of in

very business those, partner contributed our XX% employee results. Xth beyond the, for benefit with Benefits the the posted Our All quarter, employers U.S. strong to these unlocking customer base. Employee revenue growth channels a for broader double-digit the expanded delivered and Amongst to up QX. channel straight meaningfully actually, quarter another solutions Canadian offering quarter, in

the multichannel consumers. in investment paying our in Overall, opportunity coverage of we quarters. all our we evaluating sales part expand potential We and markets and overall to business our invest to and are off this investing team Our continue what approach, as we will area to best the portfolio last as safety track few market strengthened to we cyber our have develop in in committed is opportunities and globally. plan for a long-term growth on to secular see intend

pace or locations. those and on with locations Family or more favorite they're whether and their parents cyber or Norton Ultimate, features, digital new a we product smoother released new products and user receive PC. geographic with as locations notifications browsing create to establish expanded accelerate offering we secure or innovation Windows helped that safety opened experience performance We Utilities maintenance the device quarter their pipeline and the of gaming Norton helps privacy, help As to release consumer's identity. set worked that for every arrives the including result, to a and content protect continued our consumers, departs of devices, when to bring streaming We approved faster more child's a

in-person. parents school stay to of timely about We their features dates receive child's the informed device. specific from Alert location location children's times which new as alerts Both headed helps introduced setting check-ins Me, automatic also by were their kids these to and of many back quite

added loans as and And front, payday consumers fraudulent broader loans. opening Lock short-term like expands. with social digital added LifeLock block features footprint in more their new we provide markets other identity monitoring the U.S. to protection the Payday to we've selected of to media help Loan On clients

awareness globally protection, and our to identity to the relevant customers provide and to evolve new As most audiences. continue grows features we our protect products for road-map

share profiling team, can of pillar helps A cannot commitment ongoing to normal I'm responsible we that governance and collect future. provide and of ways Norton Privacy, new ways track We've a together safe, been our or online. I'm product additional footprints our released Norton I our from progress positive in their personal this a the help strengthen digital we proud APG report. check continue in X AntiTrack private the that employees, companies from that and expertise, extension their browser all the have to on to websites EMEA as our QX, good encourage momentum consumers that and to making we protect of see app highlights now sustainable to achievements This pillars week. expanded portfolio NortonLifeLock's prevent social, inclusive, pledge privacy, cyber also browsers As front tracking our to control and released should data. privacy or are help we IR we first reputation help has of their U.S. pleased and investment on protect develop and and In ways way people you do. to our earlier from one online release seen for safety overall, environmental, their sell in all activities privacy this consumers continue the That and websites And technology VPNs and in our consumer made to AntiTrack bring users build control new and of Company. online and this privacy. to We're area this website. to and together is to report manage area seeing

enable technologies improving team's a customer single, efficiencies more interface. our the internal with Technology the These of built Intelligence Company. Business business they the platform efforts, in-house leaving the for to advocated to or for while of is And in were LifeLock better the our of marketing platform example XXXX for what by launch technology. sales recognized which Group We operations, top was that and the customer, customer legacy they Sammys, Awards, the on services sales for Marketing value. within recognized The engineers a service initiative development XXXX of spring empowered by operations. the The replace us of vendor delivered. were innovation were companies we a as the This deliver Norton driving customers great cost Sales our also, in a new the and rank opportunity upgrading delighted they XXXX. own importantly, and easy-to-use one key take to call solution medium-sized supplied and Additionally, identified

Natalie would update to results, turn discuss over like I Before proposed Avast. with on our to merger the the financial to an call provide I

We made and with support progress an the crossed to great combination milestone enthusiastic accelerate with X to our opportunity and we ongoing transformation NortonLifeLock shareholders be companies about safety. merger the We continue the in the voting innovation important of cyber proposed Avast. have to to today overwhelmingly

stated. step jurisdictions. for calendar to to we working other on key regulatory next mid track antitrust And being next But in believe of the all November also, Avast XXXX, we shareholder scheduled vote previously relevant as the collaboratively actively the processes and With year and are XX. close

been me invest safety allow on Natalie this financials. strategy empower will new has the accelerate more move protect now the cyber transaction of the turn combined and to call an companies and in the let and Our more over lives more as to for innovation consumers for And online, details products. day to

Natalie Derse

hello, may world our And joy your who the and all to you celebrating and shareholders, customers, are around Diwali of festival happiness and Vincent. you, today, Thank To families. bring listeners the lights everyone.

delivered QX first solid discussion, will in financials, QX outlook provide then today's results for non-GAAP For on rounding out our half strong year. full-year. We of a and with I quarter, another starting fiscal our our focus

XX%. QX revenue $XXX million, Our was up

and offerings, remains efforts, was by our growth across supported and international product continued renewal GOs growth products. Booking’s expansion. of X% Our broad-based expanded

increased direct X.X In feel total XXX,XXX there growing products. first net the seasonally customer half year-over-year our net proud XX.X we lower to was net QX our quarter-over-quarter. our for quarter million, that new of sequential XXX,XXX demand direct to is quarter year. added in our And is where customers in This adds. account have customers a million net fiscal eighth adding customers strong and demand, of over adding new customer Our there is adds evidenced consecutive

per Our sequential operational average $X.XX. basis or revenue increased user to XX%-unit with strong ARPU, monthly retention. And metrics our on remained a

our revenue. in momentum consistent result, business a growth direct up X% As maintained

with audiences through our our our newer customers more We cross-sell cohorts product accelerated to offerings markets, the pace to scaling more We're identity of of while existing international continue of broader expansion up customers. the drive into protection protection engagement cyber new loyal also efforts. higher with providing releases reaching safety

our strong from As continued Vincent well employee with posted up earlier, as QX, channels. distribution year-over-year, partner in results XX% benefits, again mentioned growth strength as business in other

key our on a accounts strategy long-term for an total, it partner to tenant approximately are investment Although will by remains us, of growth far. business continue we be our our and important year-to-date area Locks XX% thus of and encouraged for the growth

and in long-term for to evaluating G&A And these investments at reach QX gains pipeline of and us we With operate XX% long-term was million sustainable are X% growth. revenue, market optimize both product investment we products for pace QX robust, have costs. evolving sell with points margin, With less up through up and product infrastructure customers. drive increasingly are our we spend [Indiscernible] to income $XXX EPS focused increasing constantly a the maintaining long-term for XXX and competitive an efforts short-term year. We year-over-year lower as margin the advertising of our Turning that growth-focused XX% effectiveness on productivity We the year-over-year. net gross the was EPS at profitability, maximize guidance expansion this than approach investments marketing, focused high achieving a our our end launches EPS consumers, Operating and and was in to of sales with Diluted objective operating new the May range. in of we while XX%, our year-over-year. how basis of decisions. environment. the on R&D, remain quarter, $X XX% up shared back return our we in we also $X.XX on

improvement with was cash flow $XX We X which our approximately sale to and sheet. flow flow we million free balance $XX per remained included times cash million, regular In cash in Turning cash $XXX LS seasonal sheet. total debt our in QX and cash levered income healthy proceeds $X.XX.X over the which our operating of ended maintain We and flow and also a approximately payments. form with buildings. a of of was shareholders QX, net cash, tax growth. QX, net $X.X line Year-to-date the million million of our Mountain includes strong position common was both operating at July balance to liquidity quarterly View in the returned $XX dividend share. from billion

short-term the transaction. to we share as approximately the XXXX, And For all cash buyback as that release. current dividend of XXth, deploy billion XXXX in due per has still cannot a business the be described close common reminder the a in XXnd, shareholders Directors Board approved the pending of November of we while share the remaining paid press program, Avast regular quarterly of have December of in $X.X to it QX, record $X.XX.X for on on

and to turning QX full-year outlook. our Now,

Vincent Pilette

We assuming rates to which to growth to in the range translates million year-over-year. $XXX currency $XXX XX% X% stable revenue non-GAAP of expect QX quarter-over-quarter, million,

We in expect EPS be QX the $X.XX range per share. $X.XX to non-GAAP of to

For in range constant we in $X.XX, $X.XX in what the May on and year-over-year narrowing currency shared revenue back EPS EPS our range we and versus of Analyst end you at Day. the X% to expect to with the full-year, growth high the revenue to both XX% of non-GAAP non-GAAP

Natalie Derse

around have on consistent We year. foreign half the growth to momentum to through with exchange to evolving continue second pandemic look building and in our navigated our this and macro rate objectives. the we impacts we successfully forward the inflation, fluctuations, are expectations. on well-positioned conditions, Even and deliver And hit of profitability

M&A meet time I a growth As now manage needs continue and we we look to not and this customer back questions. to challenge the take able do are to your any forward, today to specific we to keep at for call prioritize, Please, mind will questions focus time. the manner. in Thank related Operator. ourselves -- anticipate, to answer turn your Operator in any will you

Operator

remind to At this Instructions]. like to you. ask everyone Thank in time, [Operator would I a question, order

Your from from open. Kalia the comes Barclays, line first Saket is question your line

Vincent Pilette

Good afternoon.

Saket Kalia

Hey, good hey, taking thanks my for here. questions Vincent, Hey afternoon, Natalie, Vincent.

Vincent Pilette

Yeah.

Saket Kalia

if to you into just you, maybe Natalie, start little with double-click just wondering bit I could billing’s the metric. a was

to hear. we heard really growth is in think I X% bookings, which good

maybe walk come there kind Can to bookings, there's growth you bit takes X%. was the a just that think and -- of quarters. billings you slightly maybe that know lower tougher through compared the compare, kind growth growth little some could know, maybe prior on is I there? compared I to always currency in puts mean than about of of a that just I to touch you just billings

Natalie Derse

QX I'm models, going not Look, on surprised our to bookings, at the models. that around focus it's the results as in bookings internal to Sure. with I'm question am question. I response your But Thanks, our X% our line not Saket. in surprised also

historically, did we but bookings, guide don't quarter. share a we that lighter know, you seasonally As QX is

the volume terms, that look search on our if traffic in in either recognized and on market competitive then was the early put up. than last spend year. saw landscape lower into we also being saw what our the on we also search you on knew even We hone external etc., we analytics, at Google prior that metrics, And was metrics, and branded you that non-branded quarters across early advertising very

is, of we renewal, to healthy I'd first-year recurring as and get us. and business bookings amount The those you to step-up they to you know, know, with you retention renew choose other when thing as in get acquisition, there's the that as those look as model our encourage a guys with customers customer the terms at with the

So, it QX, to to about at us. factor net customer we new QX renewable model, to year you year back from step-up XXX,XXX the you customers. we date to Again, from a bookings point XXX,XXX added X% for customers. that component into last you renewal have really in net we get base, that seasonality this in result factor When the added the the in time, last QX would

Vincent Pilette

at a step underlying way. bookings quarter-out, about Like revenue few add, obviously, investor understand but represent quarter-in, we bookings, trend can trend, and quarter backs. to same XX%. Again, see X% so every this quarter, we the for I metrics, but just trending can guide multi-quarter don't If on next guided but somewhat range. and in a the Not revenue we bookings we that

Saket Kalia

a you Got of lot of it. just big Got Can business? guess, things it. maybe Vincent, That's how that market? as currently type international more happening very And market? how as a is a big us remind percentage Is of an can Is an both? how for identity what's is internationally. follow-up of for see of international Curious see long-term longer-term. my the -- bit international you you, antivirus of And I little helpful. a good it percentage you of total? more that monitoring

Vincent Pilette

give question, of represents the International It's you not indeed about It is answer. a enough. business. good big short our Saket. XX% Belgium I'll

we know, our Avila acquired you accelerate internationally. to As growth

the lot As which moving identity I those did beyond call outside-of-the you includes not now elements. We efforts. above - security, offering restoration, of that our and countries our good what to up so, portfolio move U.S. solutions, exploring the protecting of and in digitalize, start element services. into include to said, Initially build

When demographic, versus of I all U.S. the to different with merger huge more the U.S. the on international to basis we're as and know industry, the even you be unit continue going reverse the should or we XX technology, XX growth I expand. in be Avast at look opportunities. think will the on that, they the balanced. outside boost long-term will perspective, of the Obviously, proposed structural more

Saket Kalia

Very helpful. Thanks, guys.

Vincent Pilette

Thank you.

Operator

of Fodderwala from Stanley. Morgan Your next from [ comes Thank the Q Operator's Hamza line question you. - Instructions]

now Your open. line is

Hamza Fodderwala

questions. good taking guys. Hey, my for evening, Thanks

Vincent Pilette

Sure.

Hamza Fodderwala

question. curious thinking alluded I'm keep inflation, NortonLifeLock since into of pricing terms you. Natalie, to next to renewal, the what one I'll about year. you on fiscal Thank it in is particularly

Vincent Pilette

and a mind, back little bit in a context. step don't you I'll it take If I'll broader

acquired you as we've First, Avira. know,

up-set number freemium a expanding to our the ongoing that When model, cyber to expanding our then and entry. platform. fully would We Our going different pricing, Internet objective all X structure. move you coming protected how the users to that's model safety are see and cyber criminality. to love from other point us of first And X it have to And you're the is to our do to comes structure, countries. invest into security, obviously, consciously freemium scale prices, premium model, billion above

It price, we product a you we way pricing in, and inflation, philosophy your competitive renewal as you to provide to normal is business to whole get is cost, new first as in, that First, country. price environment. at have dynamic MSRP you every a tracking, then know, set. the membership, a describing And in higher to the get the continue environment, I'm as It that have the we promotion so with the the level that dynamic of it. the model value then And follows is add membership. up and customers of time then members value our the new and to competition

Hamza Fodderwala

Thank you.

Operator

Pilette, remarks. the Thank to no this time Instructions]. call more questions. closing you. there At Vincent I will are [Operator turn CEO for back

Vincent Pilette

Operator. of X trying wait X there's X was to in, get minutes more don't time so question, Why see to no let's we nobody had to question plenty more last minute we later time if there check

don't mind. If you

Operator

Instructions]. Sure. [Operator

Vincent Pilette

few approved between thank are that very the one-on-one have. questions merger strategy, as And everyone. confidence otherwise sessions overwhelmingly obviously, open our shares with next transaction, and of acquisition as vote We be management always and board very confidence, for do have Thank into the into would the plenty Avast. of of to available days. confidence We, issuance that a our confidence the our see want specific into the Okay. the and connecting I management. have We'll for or we'll soon. you, now shareholders investors any

Operator

call. concludes conference Thank you. the This

You may now disconnect. Thank you.

Gen Digital (GEN) 4 Nov 212022 Q2 Earnings call transcript