A bevy of high profile cyberattacks and the Equifax data breach has been good for Symantec, but a shift to cloud subscriptions is dinging financial results.
Symantec’s second quarter earnings results and conference call were notable on a few fronts. Key takeaways were:
The company got a boost in LifeLock subscribers after the Equifax data breach.
- A steady stream of cyberattacks have boosted its enterprise sales.
- And enterprises are choosing to standardize on Symantec and consumers are starting to buy the company’s digital safety message.
- But Symantec also missed estimates because a shift to cloud subscriptions is happening faster than the company thought.
Symantec reported a second quarter net loss of 2 cents a share on revenue of $1.24 billion, up 27 percent from a year ago due to acquisitions. Non-GAAP earnings were 40 cents a share. Wall Street was expecting second quarter earnings of 42 cents a share on revenue of $1.28 billion.
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As for the outlook, Symantec projected non-GAAP third quarter earnings of 42 cents a share to 46 cents a share on revenue between $1.23 billion and $1.26 billion. For fiscal 2018, Symantec sees non-GAAP earnings of $1.66 a share to $1.76 a share on revenue of $4.88 billion to $4.98 billion.
Symantec completed the sale of its Website security and PKI products to DigiCert Oct. 31.
On a conference call, CEO Greg Clark noted the following:
“There were several major cyber attacks that received widespread public attention. Symantec products fared very well in these incidents, and that performance has driven increased long-term interest in Symantec. First, the Petya and WannaCry ransomware attacks caused significant and unprecedented economic damage to enterprises measured in the hundreds of millions of dollars, making security top of mind in the board room as well as the general public…”
“We added a substantial number of new LifeLock members after the Equifax breach was announced in September, but this only marginally contributed to Q2 results…”
“More and more customers are choosing to standardize on our Integrated Cyber Defense Platform because of our superior protection, cross-product integration and lower overall cost of ownership. Adoption of our Integrated Cyber Defense Platform is leading to an increase in the number of larger multiproduct deals, which is a strong validation that customers are designing Symantec into their future security architectures. These trends however, are also affecting our in-period revenue recognition, the mix of our bookings are shifting towards a more ratable revenue recognition as customers are increasingly adopting our Cloud subscription and virtual appliance products in multiproduct deals. We anticipated this mix shift in our remarks at our last financial Analyst Day, but the shift is happening faster than we expected.”
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