Symantec: Fiscal 2Q15 Financial Results

(in $ million)	2Q14	2Q15	6 mo. 14	6 mo. 15
Revenue	1,637	1,617	3,346	3,352
*Growth*		-1%		0%
Net income (loss)	241	244	398	480

Information management only

(in $ million)	2Q14	2Q15
Revenue	602	621
*Growth*		3%
Operating income	145	122

Symantec Corp. reported the results of its second quarter of fiscal year 2015, ended October 3, 2014.

Michael A. Brown, president and CEO, said: “Symantec delivered solid results this quarter that demonstrate the underlying strengths of our security and information management businesses. We are pleased with the growth we achieved in enterprise endpoint security and data loss prevention. Strong performance in our NetBackup appliances accelerated from 35% year-over-year growth in the June quarter to 45% in the September quarter.”

“Symantec operates the largest civilian threat intelligence network in the world, which is a competitive advantage that makes our products and services increasingly capable of defending against sophisticated threats,” he said. “In October, we released an upgrade to our flagship enterprise security product, Symantec Endpoint Protection, which improves our ability to stop targeted attacks, and we launched our Managed Adversary Threat Intelligence offering that provides enterprise customers with greater threat intelligence as to who is attacking them.”

Thomas Seifert, EVP and CFO, said: “We are successfully executing against the priorities we outlined at the beginning of the year, and in particular our eight revenue and efficiency initiatives are contributing to revenue and margin expansion. Achieving nearly 29% non-GAAP operating margin this quarter, a 120 basis point improvement year-on-year, underscores our ability to improve profitability. We are on track to achieve our fiscal year revenue and operating margin targets at our original guided exchange rate.“

Last month, Symantec announced plans to separate into two publicly traded companies, one focused on security, the other on information management.

“We believe this separation will provide each business the flexibility and focus to drive growth and enhance shareholder value,” Seifert said. “To minimize disruption for our customers and partners, we have dedicated teams managing the separation process and our go-to-market capabilities will remain largely intact for the remainder of this fiscal year.”

Revenue guidance for 3FQ15: $1,650 to $1,690 (0.9% to 3.2% Y/Y growth)
Revenue guidance for FY15: $6,600 to $6,680 (0.3% to 1.5% growth)

Comments

Thomas J. Seifert, CFO:
"License revenue grew 25% year-over-year, driven by strength in Enterprise Backup and an easier compare versus the year-ago period and it was also up 8% sequentially. Renewals were up year-over-year from growth in Storage Foundation and Enterprise Backup, and Enterprise subscription grew 6% year-over-year, accounting for 16% of total revenue.
"Information Management revenue increased 3% year-over-year to $621 million. Growth in Enterprise Backup was offset by weakness in information availability. GAAP operating margin declined to 20% compared to 24% in the year-ago period, due to an increased revenue in our lower margin appliances. Gross margin increased 30 basis points year-over-year to 84%, as lower royalty payments more than offset an increase in lower margin appliance revenue."