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Symantec Reports Record First Quarter Fiscal 2012 Results
- GAAP Revenue of $1.653 billion
- Non-GAAP Operating Margin of 27 percent
- Non-GAAP Earnings Per Share of $0.40
- GAAP Deferred Revenue of $3.689 billion
- Cash Flow from Operations of $503 million
Symantec Corp. (Nasdaq: SYMC) today reported the results of its first quarter of fiscal year 2012, ended July 1, 2011. GAAP revenue for the fiscal first quarter was $1.653 billion, up 15 percent year-over-year and up 9 percent after adjusting for currency.
"The current threat landscape continues to be toxic and targeted. In addition, information is growing at unprecedented rates. As a result, customers increasingly understand the value of our unique portfolio and are expanding their commitment to Symantec. For the fourth consecutive quarter, we exceeded all of our key financial metrics," said Enrique Salem, president and chief executive officer, Symantec. "We are capitalizing on new growth opportunities in cloud, mobile and virtualization and will continue to deliver new solutions to help both consumers and enterprises securely access and use information across multiple devices and platforms."
"Our third consecutive quarter of double digit bookings growth resulted in the strongest June quarter revenue, deferred revenue and operating cash flow in Symantec's history," said James Beer, executive vice president and chief financial officer, Symantec. "Our record results were driven by strength in backup, data loss prevention and consumer as well as ongoing stability in the storage and availability management business. In addition, our authentication business once again exceeded expectations and delivered its fourth consecutive quarter of better than expected results."
GAAP Results: GAAP operating margin for the first quarter of fiscal year 2012 was 17.1 percent compared with 13.5 percent for the same quarter last year. GAAP net income for the fiscal first quarter was $172 million compared with net income of $161 million for the year-ago period. GAAP diluted earnings per share were $0.22 compared with $0.20 for the year ago quarter, an increase of 10 percent year-over-year.
GAAP deferred revenue as of July 1, 2011, was $3.689 billion compared with $2.998 billion as of July 2, 2010, up 23 percent year-over-year and up 17 percent after adjusting for currency. Cash flow from operating activities for the first quarter of fiscal year 2012 was $503 million compared with $335 for the year ago period, an increase of 50 percent year-over-year. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.297 billion.
Non-GAAP Results: Non-GAAP operating margin for the first quarter of fiscal year 2012 was 27.0 percent compared with 26.5 percent for the same quarter last year. Non-GAAP net income for the first quarter was $309 million compared with $284 million for the year-ago period, an increase of 9 percent year-over-year. Non-GAAP diluted earnings per share were $0.40 compared with earnings per share of $0.35 for the year-ago quarter, an increase of 14 percent year-over-year.
During the first quarter of fiscal year 2012, Symantec repurchased 10 million shares for $198 million at an average price of $18.98. Symantec has $679 million remaining in the current board authorized stock repurchase plan.
Business Segment and Geographic Highlights
For the quarter, Symantec's Consumer segment represented 32 percent of total revenue and increased 11 percent year-over-year (5 percent after adjusting for currency). The Security and Compliance segment represented 28 percent of total revenue and increased 31 percent year-over-year (24 percent after adjusting for currency). The Storage and Server Management segment represented 36 percent of total revenue and increased 14 percent year-over-year (7 percent after adjusting for currency). Services represented 4 percent of total revenue and declined 20 percent year-over-year (24 percent after adjusting for currency), as expected due to the company's move to a partner-led consulting model. Growth rates for the Security and Compliance and Services segments include the impact of moving Managed Security Services from the Services segment into the Security and Compliance segment.
International revenue represented 52 percent of total revenue in the first quarter of fiscal year 2012 and increased 21 percent year-over-year (8 percent after adjusting for currency). The Europe, Middle East and Africa region represented 29 percent of total revenue for the quarter and increased 16 percent year-over-year (2 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 18 percent of total revenue and increased 29 percent year-over-year (15 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 53 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 $74 million ahead of our $70 million forecast. The earnings per share accretion of half a penny was a penny and a half better than expected. In addition, $3 million of revenue was realized from the Clearwell acquisition, which was completed ahead of schedule in the June quarter.
Second Quarter Fiscal Year 2012 Guidance
Guidance assumes an exchange rate of $1.43 per Euro for the September 2011 quarter versus the actual weighted average rate of $1.30 and an end of period rate of $1.38 per Euro for the September 2010 quarter.
For the second quarter of fiscal year 2012, ending Sept. 30, 2011, revenue is estimated between $1.655 billion and $1.675 billion, up 12 to 13 percent year-over-year as reported.
GAAP diluted earnings per share are estimated between $0.21 and $0.22. Non-GAAP diluted earnings per share are estimated between $0.38 and $0.39.
Deferred revenue is expected to be in the range of $3.485 billion and $3.515 billion, up 12 to 13 percent year-over-year as reported and in line with seasonal patterns.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal first quarter 2012, ended July 1, 2011, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/.... 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.
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.
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