- Non-GAAP Revenue of $1.48 billion
- Non-GAAP Operating Margin of 29.2 percent
- Non-GAAP Earnings Per Share of $0.36
- Non-GAAP Deferred Revenue of $2.91 billion
- Cash Flow from Operations of $226 million
MOUNTAIN VIEW, Calif. – October 28, 2009 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its second quarter of fiscal year 2010, ended Oct. 2, 2009. GAAP revenue for the fiscal second quarter was $1.47 billion. Non-GAAP revenue was $1.48 billion, down 3 percent over the comparable period a year ago (down 2 percent after adjusting for currency).
“Execution against our key priorities in a tight spending environment enabled us to achieve solid results,” said Enrique Salem, president and chief executive officer, Symantec. “In particular, we were pleased with the strength in the consumer segment and with the initial progress in SMB security. We are encouraged by the signs of stabilization in the markets we serve and are confident that we will continue to see gradual improvement over the next few quarters.”
“We delivered solid results on each of our key financial metrics and our cash flow generation highlights the strength of our business model,” said James Beer, executive vice president and chief financial officer, Symantec. “Our continued focus on expense management resulted in better than expected earnings.”
GAAP Results: GAAP operating margin for the second quarter of fiscal year 2010 was 17.4 percent compared with 14.3 percent for the same quarter last year. GAAP net income for the fiscal second quarter was $150 million compared with $126 million for the same quarter last year. GAAP diluted earnings per share were $0.18 compared with earnings per share of $0.15 for the same quarter last year, up 20 percent year-over-year. GAAP deferred revenue as of Oct. 2, 2009 was $2.91 billion compared with $2.71 billion as of Oct. 3, 2008, up 7 percent year-over-year.
Cash flow from operating activities for the second quarter of fiscal year 2010 was $226 million. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.33 billion.
Non-GAAP Results: Non-GAAP operating margin for the second quarter of fiscal year 2010 was 29.2 percent, flat year-over-year. Non-GAAP net income for the fiscal second quarter was $294 million. Non-GAAP diluted earnings per share were $0.36 compared with earnings per share of $0.37 for the year-ago quarter.
Non-GAAP deferred revenue as of Oct. 2, 2009 was $2.91 billion compared with $2.72 billion as of Oct. 3, 2008, an increase of 7 percent year-over-year. After adjusting for currency, non-GAAP deferred revenue increased 4 percent year-over-year.
For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.
During the second quarter of fiscal year 2010, Symantec repurchased 7.9 million shares for $120 million at an average price of $15.22.
Business Segment and Geographic Highlights
For the quarter, Symantec’s Storage and Server Management segment represented 38 percent of total non-GAAP revenue and declined 9 percent year-over-year (declined 8 percent after adjusting for currency). The Consumer segment represented 31 percent of total non-GAAP revenue and increased 6 percent year-over-year on an actual and currency adjusted basis. The Security and Compliance segment represented 24 percent of total non-GAAP revenue and declined 3 percent year-over-year (declined 1 percent adjusting for currency). Services represented 7 percent of total non-GAAP revenue and declined 1 percent year-over-year (flat after adjusting for currency).
International revenue represented 51 percent of total non-GAAP revenue in the second quarter of fiscal year 2010 and declined 2 percent year-over-year (flat after adjusting for currency). The Europe, Middle East and Africa region represented 31 percent of total non-GAAP revenue for the quarter and declined 5 percent year-over-year (declined 1 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 15 percent of total non-GAAP revenue and increased 5 percent year-over-year (increased 3 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 54 percent of total non-GAAP revenue and declined 4 percent year-over-year on an actual and currency adjusted basis.
Third Quarter Fiscal Year 2010 Guidance
Guidance assumes an exchange rate of $1.47 per Euro for the December 2009 quarter versus the actual weighted average rate of $1.32 per Euro for the December 2008 quarter, approximately an 11 percent currency benefit. The end of period rate for the December 2008 quarter was $1.39, approximately a 6 percent currency benefit versus the $1.47 per Euro assumption for the December 2009 quarter.
For the third quarter of fiscal year 2010, ending Jan. 1, 2010, GAAP revenue is estimated between $1.484 billion and $1.514 billion. GAAP diluted earnings per share are estimated between $0.23 and $0.24. GAAP deferred revenue is expected to be in the range of $2.998 billion and $3.048 billion.
Non-GAAP revenue for the third quarter of fiscal year 2010 is estimated between $1.485 billion and $1.515 billion. Non-GAAP diluted earnings per share are estimated between $0.36 and $0.37. Non-GAAP deferred revenue is expected to be in the range of $3.000 billion and $3.050 billion.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal second quarter 2010, ended Oct. 2, 2009, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. A replay and script of our officers’ remarks will be available on the investor relations’ home page shortly after the call is completed.
Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at more points, more completely and efficiently, enabling confidence wherever information is used or stored. More information is available at www.symantec.com.
Note to Editors: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at http://www.symantec.com/news. All prices noted are in U.S. dollars and are valid only in the United States.
Symantec and the Symantec Logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.
FORWARD-LOOKING STATEMENTS: This press release contains statements regarding our financial and business results, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended April 3, 2009.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of SFAS 123(R), impairment charges and other corporate events. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations’ page of our Web site at www.symantec.com/invest.
Symantec Corporation - Condensed Consolidated Financial Statements (pdf)