Symantec Reports Strong First Quarter Revenue and Earnings
CUPERTINO, Calif. – July 30, 2008 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its first quarter of fiscal year 2009, ended July 4, 2008. GAAP revenue for the quarter was $1.650 billion and non-GAAP revenue was $1.655 billion, up 16 percent over the comparable period a year ago.
GAAP Results: GAAP net income for the first quarter of fiscal year 2009 was $187 million, compared to $95 million for the same quarter last year. GAAP diluted earnings per share were $0.22, compared to earnings per share of $0.10 for the same quarter last year.
Non-GAAP Results: Non-GAAP net income for the first quarter of fiscal year 2009 was $342 million, up 30 percent compared to $263 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.40, up 38 percent compared to earnings per share of $0.29 for the year ago quarter. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached condensed consolidated financial statements.
GAAP deferred revenue at the end of the quarter was $3.012 billion. Non-GAAP deferred revenue grew 12 percent to $3.025 billion compared to $2.709 billion at the end of the first quarter of fiscal year 2008.
Cash flow from operating activities for the first quarter of fiscal year 2009 was $414 million, up 18 percent compared to $351 million for the same quarter last year.
"The quarter's strong growth was driven by our team's ability to cross-sell and up-sell the breadth of our product portfolio which is reflected in the number of large transactions that include multiple products," said John W. Thompson, chairman and chief executive officer, Symantec. "The fiscal year is off to a terrific start with solid execution and performance across all segments and geographies."
For the quarter, Symantec's Storage and Server Management segment represented 37 percent of total non-GAAP revenue and grew 20 percent year-over-year. The Consumer business represented 29 percent of total non-GAAP revenue and grew 12 percent year-over-year. The Security and Compliance segment represented 27 percent of total non-GAAP revenue and grew 12 percent year-over-year. Services represented 7 percent of total non-GAAP revenue and grew 35 percent year-over-year.
International revenues represented 52 percent of total non-GAAP revenue in the first quarter of fiscal year 2009 and grew 19 percent year-over-year. The Europe, Middle East and Africa region represented 34 percent of total non-GAAP revenue for the quarter and grew 20 percent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 14 percent of total non-GAAP revenue and grew 20 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 52 percent of total non-GAAP revenue and increased 13 percent year-over-year.
Second Quarter Fiscal Year 2009 Guidance
For the second quarter of fiscal year 2009, ending Oct. 3, 2008, GAAP revenue is estimated between $1.520 billion and $1.560 billion. GAAP diluted earnings per share are estimated between $0.15 and $0.17.
Non-GAAP revenue for the quarter is estimated between $1.525 billion and $1.565 billion. Non-GAAP diluted earnings per share are estimated between $0.34 and $0.36.
GAAP deferred revenue is expected to be in the range of $2.865 billion and $2.965 billion. Non-GAAP deferred revenue is expected to be in the range of $2.875 billion and $2.975 billion.
Symantec signed 336 agreements worldwide versus 249 in the same period a year ago with a contract value of more than $300,000 each. Of the 336 agreements, 85 had a value of more than $1 million each versus 48 in the same period a year ago. In the first quarter of fiscal year 2009, nearly 80 percent of the large transactions included multiple products.
Symantec signed new or extended agreements with customers including Servizi Bancari Associati SpA, an Italian IT outsourcer that provides centralized IT services for more than 30 Italian national banks; the City of Cape Town; Rabobank, the Dutch-based financial services provider that operates on cooperative principles; TISCALI, an independent telecommunication company; CompSec, a leading provider of technology solutions for the intelligence community; Harris Corporation, an international communications and information technology company; Polkomtel, one of the three largest mobile operators in Poland; and SK Energy, a leading total energy provider in Korea.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the first quarter of fiscal year 2009, ended July 4, 2008, 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 businesses and consumers secure and manage their information. Headquartered in Cupertino, Calif., Symantec has operations in more than 40 countries. More information is available at www.symantec.com.
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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 statements relating to 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: 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 risk factors is contained in the Risk Factors section of our Form 10-K for the year ended March 28, 2008.
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) 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 Balance Sheets (pdf)