- GAAP Revenue of $1.681 billion, up 14%
- Non-GAAP Operating Margin of 25.5 %
- Non-GAAP Earnings Per Share of $0.39, up 15%
- GAAP Deferred Revenue of $3.452 billion, up 11%
- Cash Flow from Operations of $308 million
MOUNTAIN VIEW, Calif. – Oct. 26, 2011 – Symantec Corp. (Nasdaq:SYMC) today reported the results of its second quarter of fiscal year 2012, ended Sept. 30, 2011. GAAP revenue for the fiscal second quarter was $1.681 billion, up 14 percent year-over-year and up 9 percent after adjusting for currency.
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“For the fifth consecutive quarter, we met or exceeded all of our key metrics, demonstrating that our strategy is working and that we continue to execute consistently,” said Enrique Salem, president and chief executive officer, Symantec. “As customers grapple with the challenges of rapid information growth and more sophisticated attacks as well as the major IT trends of virtualization, mobility and cloud computing, the value proposition we offer to help secure and manage their information is more relevant than ever. We continue to see good demand for our products and services across the portfolio.”
“Each of our business segments and regions delivered solid growth. We achieved another quarter of strong year-over-year bookings growth and delivered record September quarter revenue, deferred revenue and earnings per share,” said James Beer, executive vice president and chief financial officer, Symantec. “Our results were driven by growth in enterprise security and backup, while our consumer business continues to perform well. We continue to effectively integrate and grow our acquired assets, as demonstrated by the authentication business once again generating strong results for the fifth consecutive quarter.”
GAAP Results: GAAP operating margin for the second quarter of fiscal year 2012 was 17.0 percent compared with 14.7 percent for the same quarter last year. GAAP net income for the fiscal second quarter was $182 million compared with net income of $136 million for the year-ago period. GAAP diluted earnings per share were $0.24 compared with $0.17 for the year-ago quarter, an increase of 41 percent year-over-year.
GAAP deferred revenue as of Sept. 30, 2011, was $3.452 billion compared with $3.104 billion as of Oct. 1, 2010, up 11 percent on an actual and currency adjusted basis. Cash flow from operating activities for the second quarter of fiscal year 2012 was $308 million compared with $310 million for the year ago period. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.253 billion.
Non-GAAP Results: Non-GAAP operating margin for the second quarter of fiscal year 2012 was 25.5 percent compared with 25.1 percent for the same quarter last year. Non-GAAP net income for the fiscal second quarter was $295 million compared with $266 million for the year-ago period, an increase of 11 percent year-over-year. Non-GAAP diluted earnings per share were $0.39 compared with earnings per share of $0.34 for the year-ago quarter, an increase of 15 percent year-over-year.
During the second quarter of fiscal year 2012, Symantec repurchased approximately 16 million shares for $275 million at an average price of $17.30. Symantec had $404 million remaining in the current board authorized stock repurchase plan at the end of the September quarter.
Business Segment and Geographic Highlights
For the September quarter, Symantec’s Consumer segment represented 31 percent of total revenue and increased 11 percent year-over-year (7 percent after adjusting for currency). Consumer segment growth rates exclude the impact of a one-time, $10 million reduction to second quarter fiscal year 2011 Consumer segment revenue.
For the quarter, the Security and Compliance segment represented 29 percent of total revenue and increased 27 percent year-over-year (22 percent after adjusting for currency). The Storage and Server Management segment represented 36 percent of total revenue and increased 9 percent year-over-year (4 percent after adjusting for currency). Services represented 4 percent of total revenue and decreased 16 percent year-over-year (19 percent after adjusting for currency), as expected due to the company’s move to a partner-led consulting model.
International revenue represented 52 percent of total revenue in the second quarter of fiscal year 2012 and increased 17 percent year-over-year (9 percent after adjusting for currency). The Europe, Middle East and Africa region represented 27 percent of total revenue for the quarter and increased 11 percent year-over-year (2 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 19 percent of total revenue and increased 26 percent year-over-year (15 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 11 percent year-over-year on an actual and currency-adjusted basis.
For the quarter, the VeriSign security business performed better than expected across all metrics, generating revenue of $89 million. The Clearwell acquisition completed its first full quarter as part of Symantec, posting its largest bookings quarter ever and exceeding expectations with $20 million of revenue.
Third Quarter Fiscal Year 2012 Guidance
Guidance assumes an exchange rate of $1.37 per Euro for the December 2011 quarter versus the actual weighted average rate of $1.35 and an end of period rate of $1.33 per Euro assumption for the December 2010 quarter.
For the third quarter of fiscal year 2012, ending Dec. 30, 2011, revenue is estimated between $1.700 billion and $1.715 billion, up 6 to 7 percent year-over-year as reported.
GAAP diluted earnings per share are estimated between $0.25 and $0.26, up 47 to 53 percent year-over-year as reported. Non-GAAP diluted earnings per share are estimated between $0.40 and $0.41, up 14 to 17 percent year-over-year as reported.
Deferred revenue is expected to be in the range of $3.685 billion and $3.705 billion, up 8 to 9 percent year-over-year as reported.
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 2012, ended Sept. 30, 2011, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. 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 1, 2011.
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)