Delaware
|
000-17781
|
77-0181864
|
||||
(State or Other Jurisdiction of
Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
350 Ellis Street, Mountain View, CA
|
94043
|
||
(Address of Principal Executive Offices)
|
(Zip Code)
|
Exhibit Number
|
Exhibit Title or Description
|
99.01
|
Press release issued by Symantec Corporation entitled “Symantec Reports Second Quarter Fiscal Year 2017 Results,” dated Novembert 3, 2016
|
99.02
|
CFO Commentary on the Second Quarter Fiscal Year 2017 Results
|
Symantec Corporation | ||
Date: November 3, 2016
|
By: |
/s/ THOMAS J. SEIFERT
|
Thomas J. Seifert | ||
Executive Vice President and Chief Financial Officer |
Exhibit Number
|
Exhibit Title or Description
|
99.01
|
Press release issued by Symantec Corporation entitled “Symantec Reports Second Quarter Fiscal Year 2017 Results,” dated November 3, 2016
|
99.02
|
CFO Commentary on the Second Quarter Fiscal Year 2017 Results
|
MEDIA CONTACT: | INVESTOR CONTACT: | |
Kristen Batch
|
Jonathan Doros
|
|
Symantec Corp.
|
Symantec Corp.
|
|
650-527-5152
|
650-527-5523
|
|
Kristen_Batch@symantec.com
|
Jonathan_Doros@symantec.com |
●
|
Revenue, Operating Margin and EPS exceed guidance; Company reiterates FY2017 revenue and raises FY2017 operating margin and EPS guidance
|
●
|
Reaffirms FY2018 EPS guidance
|
●
|
Completed significant product integration milestones; launches next-generation Symantec Endpoint Protection 14, integrates data protection and CASB and innovates on threat intelligence
|
2Q17
|
2Q16
|
Reported Y/Y
Change
|
FX Adjusted
Y/Y Change
|
|
GAAP
|
||||
Revenue
|
$979
|
$906
|
8%
|
6%
|
Operating Margin
|
(1.2%)
|
11.0%
|
(1,220) bps
|
(1,380) bps
|
Net Income (Loss)
|
($144)
|
$156
|
(192%)
|
N/A
|
Deferred Revenue
|
$2,487
|
N/A
|
N/A
|
N/A
|
EPS (Diluted)
|
($0.23)
|
$0.23
|
(200%)
|
N/A
|
CFFO
|
$55
|
$134
|
(59%)
|
N/A
|
2Q17
|
2Q16
|
Reported Y/Y
Change
|
FX Adjusted
Y/Y Change
|
|
Non-GAAP
|
||||
Revenue
|
$1,015
|
$906
|
12%
|
10%
|
Operating Margin
|
29.2%
|
31.2%
|
(200) bps
|
(320) bps
|
Net Income
|
$192
|
$196
|
(2%)
|
N/A
|
EPS (Diluted)
|
$0.30
|
$0.29
|
3%
|
N/A
|
3Q17
|
FX Adj. Y/Y
Growth
|
FY17
|
FX Adj. Y/Y
Growth
|
|
GAAP
|
||||
Revenue
|
$1,023 - $1,043
|
10% - 12%
|
$3,925 - $4,005
|
7% - 10%
|
Enterprise Security
|
$628 - $643
|
25% - 28%
|
N/A
|
N/A
|
Consumer Security
|
$395 - $400
|
(6%)
|
N/A
|
N/A
|
Operating Margin
|
(6%) – (5%)
|
1% - 3%
|
||
EPS
|
($0.02) – ($0.00)
|
($0.07) - ($0.01)
|
||
Non-GAAP
|
||||
Revenue
|
$1,070 - $1,090
|
15% - 18%
|
$4,040 - $4,120
|
11% - 13%
|
Enterprise Security
|
$675 - $690
|
34% - 37%
|
N/A
|
N/A
|
Consumer Security
|
$395 - $400
|
(6%)
|
N/A
|
N/A
|
Operating Margin
|
27% - 28%
|
27% - 29%
|
||
EPS (Diluted)
|
$0.27 - $0.29
|
$1.12 - $1.18
|
||
Tax Rate
|
29%
|
29%
|
||
Basic Share Count
|
620 million
|
615 million
|
||
Fully Diluted Share Count
|
650 million
|
640 million
|
||
FX Rate (€/$)
|
$1.12
|
$1.12
|
SYMANTEC CORPORATION
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(In millions, unaudited)
|
||||||||
September 30,
2016
|
April 1,
2016 (1)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
5,610
|
$
|
5,983
|
||||
Short-term investments
|
9
|
42
|
||||||
Accounts receivable, net
|
459
|
556
|
||||||
Other current assets
|
391
|
378
|
||||||
Total current assets
|
6,469
|
6,959
|
||||||
Property and equipment, net
|
933
|
957
|
||||||
Intangible assets, net
|
1,961
|
443
|
||||||
Goodwill
|
7,232
|
3,148
|
||||||
Equity investments
|
159
|
157
|
||||||
Other long-term assets
|
110
|
103
|
||||||
Total assets
|
$
|
16,864
|
$
|
11,767
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
139
|
$
|
175
|
||||
Accrued compensation and benefits
|
218
|
219
|
||||||
Deferred revenue
|
2,085
|
2,279
|
||||||
Current portion of long-term debt
|
600
|
-
|
||||||
Income taxes payable
|
96
|
941
|
||||||
Other current liabilities
|
371
|
419
|
||||||
Total current liabilities
|
3,509
|
4,033
|
||||||
Long-term debt
|
6,576
|
2,207
|
||||||
Long-term deferred revenue
|
402
|
359
|
||||||
Long-term deferred tax liabilities
|
2,234
|
1,235
|
||||||
Long-term income taxes payable
|
192
|
160
|
||||||
Other long-term obligations
|
89
|
97
|
||||||
Total liabilities
|
13,002
|
8,091
|
||||||
Total stockholders' equity
|
3,862
|
3,676
|
||||||
Total liabilities and stockholders' equity
|
$
|
16,864
|
$
|
11,767
|
SYMANTEC CORPORATION
|
||||||||||||||||
Condensed Consolidated Statements of Operations
|
||||||||||||||||
(Dollars in millions, except per share data, unaudited)
|
||||||||||||||||
Year-Over-Year
|
||||||||||||||||
Three Months Ended
|
Growth Rate
|
|||||||||||||||
September 30,
|
October 2,
|
Constant
|
||||||||||||||
|
2016 |
2015
|
Actual
|
Currency (1)
|
||||||||||||
Net revenues
|
$
|
979
|
$
|
906
|
8
|
%
|
6
|
%
|
||||||||
Cost of revenues
|
210
|
160
|
31
|
%
|
31
|
%
|
||||||||||
Gross profit
|
769
|
746
|
3
|
%
|
1
|
%
|
||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
338
|
336
|
||||||||||||||
Research and development
|
200
|
199
|
||||||||||||||
General and administrative
|
145
|
66
|
||||||||||||||
Amortization of intangible assets
|
34
|
14
|
||||||||||||||
Restructuring, separation, transition, and other
|
64
|
31
|
||||||||||||||
Total operating expenses
|
781
|
646
|
21
|
%
|
21
|
%
|
||||||||||
Operating income (loss)
|
(12
|
)
|
100
|
-112
|
%
|
-127
|
%
|
|||||||||
Interest income
|
4
|
2
|
||||||||||||||
Interest expense
|
(52
|
)
|
(19
|
)
|
||||||||||||
Other income, net
|
10
|
4
|
||||||||||||||
Income (loss) from continuing operations before income taxes
|
(50
|
)
|
87
|
-157
|
%
|
N/A
|
||||||||||
Provision for income taxes
|
19
|
34
|
||||||||||||||
Income (loss) from continuing operations
|
(69
|
)
|
53
|
|||||||||||||
Income (loss) from discontinued operations, net of income taxes
|
(75
|
)
|
103
|
|||||||||||||
Net income (loss)
|
$
|
(144
|
)
|
$
|
156
|
-192
|
%
|
N/A
|
||||||||
Income (loss) per share – basic:
|
||||||||||||||||
Continuing operations
|
$
|
(0.11
|
)
|
$
|
0.08
|
|||||||||||
Discontinued operations
|
(0.12
|
)
|
0.15
|
|||||||||||||
Net income (loss) per share – basic
|
(0.23
|
)
|
0.23
|
|||||||||||||
Income (loss) per share – diluted:
|
||||||||||||||||
Continuing operations
|
$
|
(0.11
|
)
|
$
|
0.08
|
|||||||||||
Discontinued operations
|
(0.12
|
)
|
0.15
|
|||||||||||||
Net income (loss) per share – diluted
|
(0.23
|
)
|
0.23
|
|||||||||||||
Weighted-average shares outstanding – basic
|
620
|
682
|
||||||||||||||
Weighted-average shares outstanding – diluted
|
620
|
687
|
||||||||||||||
Cash dividends declared per common share
|
$
|
0.075
|
$
|
0.15
|
SYMANTEC CORPORATION
|
||||||||||||||||
Condensed Consolidated Statements of Operations
|
||||||||||||||||
(Dollars in millions, except per share data, unaudited)
|
||||||||||||||||
Year-Over-Year
|
||||||||||||||||
Six Months Ended
|
Growth Rate
|
|||||||||||||||
September 30,
|
October 2,
|
Constant
|
||||||||||||||
|
2016 |
2015
|
Actual
|
Currency (1)
|
||||||||||||
Net revenues
|
$
|
1,863
|
$
|
1,818
|
2
|
%
|
1
|
%
|
||||||||
Cost of revenues
|
359
|
318
|
13
|
%
|
13
|
%
|
||||||||||
Gross profit
|
1,504
|
1,500
|
0
|
%
|
-2
|
%
|
||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
629
|
676
|
||||||||||||||
Research and development
|
370
|
397
|
||||||||||||||
General and administrative
|
229
|
150
|
||||||||||||||
Amortization of intangible assets
|
48
|
28
|
||||||||||||||
Restructuring, separation, transition, and other
|
134
|
66
|
||||||||||||||
Total operating expenses
|
1,410
|
1,317
|
7
|
%
|
7
|
%
|
||||||||||
Operating income
|
94
|
183
|
-49
|
%
|
-65
|
%
|
||||||||||
Interest income
|
9
|
5
|
||||||||||||||
Interest expense
|
(79
|
)
|
(39
|
)
|
||||||||||||
Other income (expense), net
|
23
|
(2
|
)
|
|||||||||||||
Income from continuing operations before income taxes
|
47
|
147
|
-68
|
%
|
N/A
|
|||||||||||
Provision for income taxes
|
50
|
69
|
||||||||||||||
Income (loss) from continuing operations
|
(3
|
)
|
78
|
|||||||||||||
Income (loss) from discontinued operations, net of income taxes
|
(6
|
)
|
195
|
|||||||||||||
Net income (loss)
|
$
|
(9
|
)
|
$
|
273
|
-103
|
%
|
N/A
|
||||||||
Income (loss) per share – basic:
|
||||||||||||||||
Continuing operations
|
$
|
-
|
$
|
0.11
|
||||||||||||
Discontinued operations
|
(0.01
|
)
|
0.29
|
|||||||||||||
Net income (loss) per share – basic
|
(0.01
|
)
|
0.40
|
|||||||||||||
Income (loss) per share – diluted:
|
||||||||||||||||
Continuing operations
|
$
|
-
|
$
|
0.11
|
||||||||||||
Discontinued operations
|
(0.01
|
)
|
0.28
|
|||||||||||||
Net income (loss) per share – diluted (2)
|
(0.01
|
)
|
0.40
|
|||||||||||||
Weighted-average shares outstanding – basic
|
617
|
682
|
||||||||||||||
Weighted-average shares outstanding – diluted
|
617
|
689
|
||||||||||||||
Cash dividends declared per common share
|
$
|
0.15
|
$
|
0.30
|
SYMANTEC CORPORATION
|
||||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||
(In millions, unaudited)
|
||||||||
Six Months Ended
|
||||||||
September 30,
2016
|
October 2,
2015
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
(9
|
)
|
$
|
273
|
|||
(Income) loss from discontinued operations, net of income taxes
|
6
|
(195
|
)
|
|||||
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in)
continuing operating activities:
|
||||||||
Depreciation and amortization
|
205
|
153
|
||||||
Stock-based compensation expense
|
134
|
80
|
||||||
Deferred income taxes
|
49
|
15
|
||||||
Excess income tax benefit from the exercise of stock options
|
(5
|
)
|
(6
|
)
|
||||
Other
|
31
|
8
|
||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable, net
|
225
|
108
|
||||||
Accounts payable
|
(66
|
)
|
17
|
|||||
Accrued compensation and benefits
|
(35
|
)
|
(54
|
)
|
||||
Deferred revenue
|
(213
|
)
|
(207
|
)
|
||||
Income taxes payable
|
(841
|
)
|
(46
|
)
|
||||
Other assets
|
6
|
47
|
||||||
Other liabilities
|
(51
|
)
|
(30
|
)
|
||||
Net cash provided by (used in) continuing operating activities
|
(564
|
)
|
163
|
|||||
Net cash provided by (used in) discontinued operating activities
|
(153
|
)
|
271
|
|||||
Net cash provided by (used in) operating activities
|
(717
|
)
|
434
|
|||||
INVESTING ACTIVITIES:
|
||||||||
Purchases of property and equipment
|
(39
|
)
|
(111
|
)
|
||||
Payments for acquisitions, net of cash acquired
|
(4,533
|
)
|
(4
|
)
|
||||
Purchases of short-term investments
|
-
|
(326
|
)
|
|||||
Proceeds from maturities of short-term investments
|
31
|
1,018
|
||||||
Proceeds from sales of short-term investments
|
-
|
76
|
||||||
Proceeds from divestiture of information management business, net of transaction costs
|
7
|
-
|
||||||
Net cash provided by (used in) continuing investing activities
|
(4,534
|
)
|
653
|
|||||
Net cash used in discontinued investing activities
|
-
|
(38
|
)
|
|||||
Net cash provided by (used in) investing activities
|
(4,534
|
)
|
615
|
|||||
FINANCING ACTIVITIES:
|
||||||||
Repayments of debt and other obligations
|
(17
|
)
|
(367
|
)
|
||||
Proceeds from issuance of debt, net of issuance costs
|
4,999
|
-
|
||||||
Net proceeds from sales of common stock under employee stock benefit plans
|
49
|
44
|
||||||
Excess income tax benefit from the exercise of stock options
|
5
|
6
|
||||||
Tax payments related to restricted stock units
|
(34
|
)
|
(25
|
)
|
||||
Dividends and dividend equivalents paid
|
(120
|
)
|
(210
|
)
|
||||
Repurchases of common stock
|
-
|
(250
|
)
|
|||||
Proceeds from other financing
|
10
|
-
|
||||||
Net cash provided by (used in) continuing financing activities
|
4,892
|
(802
|
)
|
|||||
Net cash used in discontinued financing activities
|
-
|
(12
|
)
|
|||||
Net cash provided by (used in) financing activities
|
4,892
|
(814
|
)
|
|||||
Effect of exchange rate fluctuations on cash and cash equivalents
|
(14
|
)
|
(12
|
)
|
||||
Change in cash and cash equivalents
|
(373
|
)
|
223
|
|||||
Beginning cash and cash equivalents
|
5,983
|
2,874
|
||||||
Ending cash and cash equivalents
|
5,610
|
3,097
|
||||||
Less: Cash and cash equivalents of discontinued operations
|
-
|
736
|
||||||
Cash and cash equivalents of continuing operations
|
$
|
5,610
|
$
|
2,361
|
SYMANTEC CORPORATION
|
||||||||||||||||||||||||||||||||
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)
|
||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data, unaudited)
|
||||||||||||||||||||||||||||||||
Year-Over-Year
|
||||||||||||||||||||||||||||||||
Three Months Ended
|
Non-GAAP Growth Rate
|
|||||||||||||||||||||||||||||||
September 30, 2016
|
October 2, 2015
|
Constant
|
||||||||||||||||||||||||||||||
GAAP
|
Adj
|
Non-GAAP
|
GAAP
|
Adj
|
Non-GAAP
|
Actual
|
Currency (2)
|
|||||||||||||||||||||||||
Net revenues
|
$
|
979
|
$
|
36
|
$
|
1,015
|
$
|
906
|
$
|
-
|
$
|
906
|
12
|
%
|
10
|
%
|
||||||||||||||||
Gross profit:
|
$
|
769
|
$
|
87
|
$
|
856
|
$
|
746
|
$
|
19
|
$
|
765
|
12
|
%
|
10
|
%
|
||||||||||||||||
Deferred revenue fair value adjustment
|
36
|
-
|
||||||||||||||||||||||||||||||
Unallocated corporate charges (3)
|
-
|
11
|
||||||||||||||||||||||||||||||
Stock-based compensation
|
5
|
2
|
||||||||||||||||||||||||||||||
Amortization of intangible assets
|
35
|
6
|
||||||||||||||||||||||||||||||
Inventory fair value adjustment
|
11
|
-
|
||||||||||||||||||||||||||||||
Gross margin %
|
78.5
|
%
|
5.8
|
%
|
84.3
|
%
|
82.3
|
%
|
2.1
|
%
|
84.4
|
%
|
|
-10 bps
|
|
-30 bps
|
||||||||||||||||
Operating expenses:
|
$
|
781
|
$
|
221
|
$
|
560
|
$
|
646
|
$
|
164
|
$
|
482
|
16
|
%
|
16
|
%
|
||||||||||||||||
Unallocated corporate charges (3)
|
-
|
76
|
||||||||||||||||||||||||||||||
Stock-based compensation
|
80
|
43
|
||||||||||||||||||||||||||||||
Amortization of intangible assets
|
34
|
14
|
||||||||||||||||||||||||||||||
Restructuring, separation, transition, and other
|
64
|
31
|
||||||||||||||||||||||||||||||
Acquisition and integration costs
|
43
|
-
|
||||||||||||||||||||||||||||||
Operating expenses as a % of revenue
|
79.8
|
%
|
-24.6
|
%
|
55.2
|
%
|
71.3
|
%
|
-18.1
|
%
|
53.2
|
%
|
|
200 bps
|
|
290 bps
|
||||||||||||||||
Operating income (loss)
|
$
|
(12
|
)
|
$
|
308
|
$
|
296
|
$
|
100
|
$
|
183
|
$
|
283
|
5
|
%
|
-1
|
%
|
|||||||||||||||
Operating margin %
|
-1.2
|
%
|
30.4
|
%
|
29.2
|
%
|
11.0
|
%
|
20.2
|
%
|
31.2
|
%
|
|
-200 bps
|
|
-320 bps
|
||||||||||||||||
Net income (loss):
|
$
|
(144
|
)
|
$
|
336
|
$
|
192
|
$
|
156
|
$
|
40
|
$
|
196
|
-2
|
%
|
N/A
|
||||||||||||||||
Gross profit adjustment
|
87
|
19
|
||||||||||||||||||||||||||||||
Operating expenses adjustment
|
221
|
164
|
||||||||||||||||||||||||||||||
Non-cash interest expense and amortization of debt issuance costs
|
12
|
-
|
||||||||||||||||||||||||||||||
Income tax effects and adjustments
|
(59
|
)
|
(40
|
)
|
||||||||||||||||||||||||||||
Total net income (loss) adjustment from discontinued operations
|
75
|
(103
|
)
|
|||||||||||||||||||||||||||||
Diluted income (loss) per share:
|
||||||||||||||||||||||||||||||||
Income (loss) per share from continuing operations
|
$
|
(0.11
|
)
|
$
|
0.41
|
$
|
0.30
|
$
|
0.08
|
$
|
0.21
|
$
|
0.29
|
|||||||||||||||||||
Income (loss) per share from discontinued operations
|
(0.12
|
)
|
0.12
|
-
|
0.15
|
(0.15
|
)
|
-
|
||||||||||||||||||||||||
Diluted net income (loss) per share
|
(0.23
|
)
|
0.53
|
0.30
|
0.23
|
0.06
|
0.29
|
3
|
%
|
N/A
|
||||||||||||||||||||||
Diluted weighted-average shares outstanding
|
620
|
24
|
644
|
687
|
-
|
687
|
-6
|
%
|
N/A
|
SYMANTEC CORPORATION
|
||||||||||||||||
Revenue and Deferred Revenue Detail (1)
|
||||||||||||||||
(Dollars in millions, unaudited)
|
||||||||||||||||
Three Months Ended
|
||||||||||||||||
September 30,
2016
|
October 2,
2015
|
|||||||||||||||
GAAP
|
Adj (2)
|
Non-GAAP
|
GAAP
|
|||||||||||||
Revenue
|
||||||||||||||||
Total Revenue
|
$
|
979
|
$
|
36
|
$
|
1,015
|
$
|
906
|
||||||||
Total Y/Y Growth Rate
|
8
|
%
|
4
|
%
|
12
|
%
|
-9
|
%
|
||||||||
Total Y/Y Growth Rate in Constant Currency (3)
|
6
|
%
|
4
|
%
|
10
|
%
|
-4
|
%
|
||||||||
Revenue by Segment
|
||||||||||||||||
Consumer Security
|
$
|
405
|
$
|
-
|
$
|
405
|
$
|
420
|
||||||||
Enterprise Security
|
574
|
36
|
610
|
486
|
||||||||||||
Revenue by Segment - Y/Y Growth Rate
|
||||||||||||||||
Consumer Security
|
-4
|
%
|
0
|
%
|
-4
|
%
|
-13
|
%
|
||||||||
Enterprise Security
|
18
|
%
|
8
|
%
|
26
|
%
|
-6
|
%
|
||||||||
Revenue by Segment - Y/Y Growth Rate in Constant Currency (3)
|
||||||||||||||||
Consumer Security
|
-5
|
%
|
0
|
%
|
-5
|
%
|
-8
|
%
|
||||||||
Enterprise Security
|
17
|
%
|
7
|
%
|
24
|
%
|
0
|
%
|
||||||||
Revenue by Geography
|
||||||||||||||||
International
|
$
|
485
|
$
|
17
|
$
|
502
|
$
|
422
|
||||||||
U.S.
|
494
|
19
|
513
|
484
|
||||||||||||
Americas (U.S., Latin America, Canada)
|
552
|
19
|
571
|
537
|
||||||||||||
EMEA (Europe, Middle East & Africa)
|
236
|
17
|
253
|
223
|
||||||||||||
Asia Pacific & Japan
|
191
|
-
|
191
|
146
|
||||||||||||
Revenue by Geography - Y/Y Growth Rate
|
||||||||||||||||
International
|
15
|
%
|
4
|
%
|
19
|
%
|
-19
|
%
|
||||||||
U.S.
|
2
|
%
|
4
|
%
|
6
|
%
|
1
|
%
|
||||||||
Americas (U.S., Latin America, Canada)
|
3
|
%
|
3
|
%
|
6
|
%
|
-3
|
%
|
||||||||
EMEA (Europe, Middle East & Africa)
|
6
|
%
|
7
|
%
|
13
|
%
|
-20
|
%
|
||||||||
Asia Pacific & Japan
|
31
|
%
|
0
|
%
|
31
|
%
|
-15
|
%
|
||||||||
Revenue by Geography - Y/Y Growth Rate in Constant Currency (3)
|
||||||||||||||||
International
|
11
|
%
|
4
|
%
|
15
|
%
|
-8
|
%
|
||||||||
U.S.
|
2
|
%
|
4
|
%
|
6
|
%
|
1
|
%
|
||||||||
Americas (U.S., Latin America, Canada)
|
3
|
%
|
3
|
%
|
6
|
%
|
-3
|
%
|
||||||||
EMEA (Europe, Middle East & Africa)
|
7
|
%
|
7
|
%
|
14
|
%
|
-6
|
%
|
||||||||
Asia Pacific & Japan
|
19
|
%
|
0
|
%
|
19
|
%
|
-3
|
%
|
||||||||
Deferred Revenue
|
$
|
2,487
|
N/A
|
N/A
|
N/A
|
SYMANTEC CORPORATION
|
||||||||||||||||
Operating Margin by Segment Detail (1)
|
||||||||||||||||
(Dollars in millions, unaudited)
|
||||||||||||||||
Three Months Ended
|
||||||||||||||||
September 30,
2016
|
October 2,
2015
|
|||||||||||||||
GAAP
|
Adj (2)
|
Non-GAAP
|
GAAP
|
|||||||||||||
Operating Income by Segment
|
||||||||||||||||
Consumer Security
|
$
|
224
|
$
|
-
|
$
|
224
|
$
|
232
|
||||||||
Enterprise Security
|
25
|
47
|
72
|
51
|
||||||||||||
Total Operating Income by Segment
|
249
|
47
|
296
|
283
|
||||||||||||
Reconciling Items:
|
||||||||||||||||
Unallocated corporate charges (3)
|
-
|
-
|
-
|
87
|
||||||||||||
Stock-based compensation
|
85
|
(85
|
)
|
-
|
45
|
|||||||||||
Amortization of intangible assets
|
69
|
(69
|
)
|
-
|
20
|
|||||||||||
Restructuring, separation, transition, and other
|
64
|
(64
|
)
|
-
|
31
|
|||||||||||
Acquisition and integration costs
|
43
|
(43
|
)
|
-
|
-
|
|||||||||||
Total Consolidated Operating Income
|
$
|
(12
|
)
|
$
|
308
|
$
|
296
|
$
|
100
|
|||||||
Operating Margin by Segment
|
||||||||||||||||
Consumer Security
|
55
|
%
|
0
|
%
|
55
|
%
|
55
|
%
|
||||||||
Enterprise Security
|
4
|
%
|
8
|
%
|
12
|
%
|
10
|
%
|
SYMANTEC CORPORATION
|
|||||
Guidance and Reconciliation of GAAP to Non-GAAP Revenue, Operating Margin and Earnings Per Share (1)
|
|||||
(Dollars in millions, except per share data, unaudited)
|
|||||
|
|
|
|
|
|
Third Quarter Fiscal Year 2017
|
|||||
Revenue Guidance
|
Three Months Ended December 30, 2016
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP revenue range
|
$1,023 - $1,043
|
|
13% - 15%
|
|
10% - 12%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$47
|
|
5%
|
|
5%
|
Non-GAAP revenue range (4)
|
$1,070 - $1,090
|
|
18% - 20%
|
|
15% - 18%
|
Segment Revenue Guidance
|
Three Months Ended December 30, 2016
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP Consumer Security revenue range
|
$395 - $400
|
|
(5%) - (3%)
|
|
(6%)
|
GAAP Enterprise Security revenue range
|
$628 - $643
|
|
27% - 30%
|
|
25% - 28%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$47
|
|
9%
|
|
9%
|
Non-GAAP Enterprise Security revenue range
|
$675 - $690
|
|
36% - 39%
|
|
34% - 37%
|
|
Three Months Ended December 30, 2016
|
||||
|
|
|
Year-Over-Year Increase
|
||
Operating Margin Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP operating margin
|
(6%) - (5%)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
3%
|
|
|
|
|
Stock-based compensation
|
9%
|
|
|
|
|
Other non-GAAP adjustments
|
20%
|
|
|
||
Non-GAAP operating margin (4)
|
27% - 28%
|
|
--
|
||
|
Three Months Ended December 30, 2016
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
($0.02) - ($0.00)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
$0.06
|
|
|
|
|
Stock-based compensation, net of taxes
|
$0.11
|
|
|
||
Other non-GAAP adjustments, net of taxes
|
$0.12
|
|
|
||
Non-GAAP diluted earnings per share range
|
$0.27 - $0.29
|
|
--
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, please see Appendix A.
|
|||||
|
|
|
|
|
|
(2) Growth rates are calculated using prior period GAAP revenue which was the same as non-GAAP revenue.
|
|||||
(3) Management refers to growth rates adjusting for currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these fluctuations. We compare the percent change of the results from one period to another period in order to provide a consistent framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the actual exchange rates in effect during the respective prior periods.
|
|||||
|
|
|
|
|
|
(4) The total percentages may not add due to rounding.
|
SYMANTEC CORPORATION
|
|||||
Guidance and Reconciliation of GAAP to Non-GAAP Revenue, Operating Margin and Earnings Per Share (1)
|
|||||
(Dollars in millions, except per share data, unaudited)
|
|||||
|
|
|
|
|
|
Fiscal Year 2017
|
|||||
Revenue Guidance
|
Year Ended March 31, 2017
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP revenue range
|
$3,925 - $4,005
|
|
9% - 11%
|
|
7% - 10%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$115
|
|
3%
|
|
3%
|
Non-GAAP revenue range (4)
|
$4,040 - $4,120
|
|
12% - 14%
|
|
11% - 13%
|
|
Year Ended March 31, 2017
|
||||
|
|
|
Year-Over-Year Increase
|
||
Operating Margin Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP operating margin
|
1% - 3%
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
2%
|
|
|
|
|
Stock-based compensation
|
8%
|
|
|
|
|
Other non-GAAP adjustments
|
16%
|
|
|
|
|
Non-GAAP operating margin
|
27% - 29%
|
|
--
|
||
|
Year Ended March 31, 2017
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
($0.07) - ($0.01)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
$0.14
|
|
|
|
|
Stock-based compensation, net of taxes
|
$0.36
|
|
|
||
Other non-GAAP adjustments, net of taxes
|
$0.69
|
|
|
||
Non-GAAP diluted earnings per share range
|
$1.12 - $1.18
|
|
--
|
||
|
Year Ended March 30, 2018
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
$0.48 - $0.58
|
|
--
|
||
Add back:
|
|
|
|
|
|
Non-GAAP adjustments
|
$1.22
|
|
|
||
Non-GAAP diluted earnings per share range
|
$1.70 - $1.80
|
|
--
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, please see Appendix A.
|
|||||
|
|
|
|
|
|
(2) Growth rates are calculated using prior period GAAP revenue which was the same as non-GAAP revenue.
|
|||||
(3) Management refers to growth rates adjusting for currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these fluctuations. We compare the percent change of the results from one period to another period in order to provide a consistent framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the actual exchange rates in effect during the respective prior periods.
|
|||||
|
|
|
|
|
|
(4) The total percentages may not add due to rounding.
|
|
Three Months Ended
|
|||||||
|
September 30,
|
October 2,
|
||||||
|
2016
|
2015
|
||||||
Cost of revenue
|
$
|
5
|
$
|
2
|
||||
Sales and marketing
|
24
|
16
|
||||||
Research and development
|
24
|
16
|
||||||
General and administrative
|
32 |
11
|
||||||
Total continuing operations
|
||||||||
stock-based compensation
|
$
|
85
|
$
|
45
|
●
|
A schedule of the dilutive impact from the convertible debt is available on our Investor Relations website
|
●
|
Our fiscal third quarter guidance assumes a weighted-average exchange rate of $1.12/€.
|
●
|
We expect GAAP revenue to be between $1,023 and $1,043 million and non-GAAP revenue to be between $1,070 and $1,090 million.
|
●
|
For our Consumer Security segment, we expect revenue to decline year-over-year by approximately 3% to 5% as reported and approximately 6% in constant currency.
|
●
|
For our Enterprise Security segment, we expect GAAP revenue to increase year-over-year by approximately 27% to 30% as reported and approximately 25% to 28% in constant currency.
|
●
|
In addition, for our Enterprise Security segment, we expect non-GAAP revenue to increase year-over-year by approximately 36% to 39% as reported and approximately 34% to 37% in constant currency.
|
●
|
We expect GAAP operating margin to be between (6%) and (5%) and non-GAAP operating margin to be between 27% and 28%.
|
●
|
We expect third fiscal quarter GAAP EPS in the range of (2¢) and break-even and non-GAAP EPS in the range of 27¢ to 29¢.
|
●
|
Our guidance assumes a fully diluted weighted-average share count of 620 million for GAAP, which equals basic weighted-average shares because the midpoint of our guidance is a loss position, and 650 million for non-GAAP.
|
●
|
Our fiscal 2017 guidance assumes a weighted average exchange rate of $1.12/€.
|
|
|
●
|
We expect GAAP revenue to be between $3,925 and $4,005 million and non-GAAP revenue to be between $4,040 and $4,120 million.
|
|
|
●
|
We expect GAAP operating margin to be between 1% and 3% and non-GAAP operating margin to be between 27% and 29%
|
|
|
●
|
We expect GAAP EPS in the range of (7¢) and (1¢) and non-GAAP EPS in the range of $1.12 to $1.18.
|
|
|
●
|
Our guidance assumes a fully diluted weighted average share count of 615 million for GAAP, which equals basic weighted-average shares because our guidance is a loss position, 640 million.
|
●
|
We expect GAAP EPS in the range of 48¢ to 58¢ and non-GAAP EPS in the range of $1.70 to $1.80.
|
SYMANTEC CORPORATION
|
||||||||||||||||||||||||||||||||
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)
|
||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data, unaudited)
|
||||||||||||||||||||||||||||||||
Year-Over-Year
|
||||||||||||||||||||||||||||||||
Three Months Ended
|
Non-GAAP Growth Rate
|
|||||||||||||||||||||||||||||||
September 30, 2016
|
October 2, 2015
|
Constant
|
||||||||||||||||||||||||||||||
GAAP
|
Adj
|
Non-GAAP
|
GAAP
|
Adj
|
Non-GAAP
|
Actual
|
Currency (2)
|
|||||||||||||||||||||||||
Net revenues
|
$
|
979
|
$
|
36
|
$
|
1,015
|
$
|
906
|
$
|
-
|
$
|
906
|
12
|
%
|
10
|
%
|
||||||||||||||||
Gross profit:
|
$
|
769
|
$
|
87
|
$
|
856
|
$
|
746
|
$
|
19
|
$
|
765
|
12
|
%
|
10
|
%
|
||||||||||||||||
Deferred revenue fair value adjustment
|
36
|
-
|
||||||||||||||||||||||||||||||
Unallocated corporate charges (3)
|
-
|
11
|
||||||||||||||||||||||||||||||
Stock-based compensation
|
5
|
2
|
||||||||||||||||||||||||||||||
Amortization of intangible assets
|
35
|
6
|
||||||||||||||||||||||||||||||
Inventory fair value adjustment
|
11
|
-
|
||||||||||||||||||||||||||||||
Gross margin %
|
78.5
|
%
|
5.8
|
%
|
84.3
|
%
|
82.3
|
%
|
2.1
|
%
|
84.4
|
%
|
|
-10 bps
|
|
-30 bps
|
||||||||||||||||
Operating expenses:
|
$
|
781
|
$
|
221
|
$
|
560
|
$
|
646
|
$
|
164
|
$
|
482
|
16
|
%
|
16
|
%
|
||||||||||||||||
Unallocated corporate charges (3)
|
-
|
76
|
||||||||||||||||||||||||||||||
Stock-based compensation
|
80
|
43
|
||||||||||||||||||||||||||||||
Amortization of intangible assets
|
34
|
14
|
||||||||||||||||||||||||||||||
Restructuring, separation, transition, and other
|
64
|
31
|
||||||||||||||||||||||||||||||
Acquisition and integration costs
|
43
|
-
|
||||||||||||||||||||||||||||||
Operating expenses as a % of revenue
|
79.8
|
%
|
-24.6
|
%
|
55.2
|
%
|
71.3
|
%
|
-18.1
|
%
|
53.2
|
%
|
|
200 bps
|
|
290 bps
|
||||||||||||||||
Operating income (loss)
|
$
|
(12
|
)
|
$
|
308
|
$
|
296
|
$
|
100
|
$
|
183
|
$
|
283
|
5
|
%
|
-1
|
%
|
|||||||||||||||
Operating margin %
|
-1.2
|
%
|
30.4
|
%
|
29.2
|
%
|
11.0
|
%
|
20.2
|
%
|
31.2
|
%
|
|
-200 bps
|
|
-320 bps
|
||||||||||||||||
Net income (loss):
|
$
|
(144
|
)
|
$
|
336
|
$
|
192
|
$
|
156
|
$
|
40
|
$
|
196
|
-2
|
%
|
N/A
|
||||||||||||||||
Gross profit adjustment
|
87
|
19
|
||||||||||||||||||||||||||||||
Operating expenses adjustment
|
221
|
164
|
||||||||||||||||||||||||||||||
Non-cash interest expense and amortization of debt issuance costs
|
12
|
-
|
||||||||||||||||||||||||||||||
Income tax effects and adjustments
|
(59
|
)
|
(40
|
)
|
||||||||||||||||||||||||||||
Total net income (loss) adjustment from discontinued operations
|
75
|
(103
|
)
|
|||||||||||||||||||||||||||||
Diluted income (loss) per share:
|
||||||||||||||||||||||||||||||||
Income (loss) per share from continuing operations
|
$
|
(0.11
|
)
|
$
|
0.41
|
$
|
0.30
|
$
|
0.08
|
$
|
0.21
|
$
|
0.29
|
|||||||||||||||||||
Income (loss) per share from discontinued operations
|
(0.12
|
)
|
0.12
|
-
|
0.15
|
(0.15
|
)
|
-
|
||||||||||||||||||||||||
Diluted net income (loss) per share
|
(0.23
|
)
|
0.53
|
0.30
|
0.23
|
0.06
|
0.29
|
3
|
%
|
N/A
|
||||||||||||||||||||||
Diluted weighted-average shares outstanding
|
620
|
24
|
644
|
687
|
-
|
687
|
-6
|
%
|
N/A
|
SYMANTEC CORPORATION
|
|||||
Guidance and Reconciliation of GAAP to Non-GAAP Revenue, Operating Margin and Earnings Per Share (1)
|
|||||
(Dollars in millions, except per share data, unaudited)
|
|||||
|
|
|
|
|
|
Third Quarter Fiscal Year 2017
|
|||||
Revenue Guidance
|
Three Months Ended December 30, 2016
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP revenue range
|
$1,023 - $1,043
|
|
13% - 15%
|
|
10% - 12%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$47
|
|
5%
|
|
5%
|
Non-GAAP revenue range (4)
|
$1,070 - $1,090
|
|
18% - 20%
|
|
15% - 18%
|
Segment Revenue Guidance
|
Three Months Ended December 30, 2016
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP Consumer Security revenue range
|
$395 - $400
|
|
(5%) - (3%)
|
|
(6%)
|
GAAP Enterprise Security revenue range
|
$628 - $643
|
|
27% - 30%
|
|
25% - 28%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$47
|
|
9%
|
|
9%
|
Non-GAAP Enterprise Security revenue range
|
$675 - $690
|
|
36% - 39%
|
|
34% - 37%
|
|
Three Months Ended December 30, 2016
|
||||
|
|
|
Year-Over-Year Increase
|
||
Operating Margin Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP operating margin
|
(6%) - (5%)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
3%
|
|
|
|
|
Stock-based compensation
|
9%
|
|
|
|
|
Other non-GAAP adjustments
|
20%
|
|
|
||
Non-GAAP operating margin (4)
|
27% - 28%
|
|
--
|
||
|
Three Months Ended December 30, 2016
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
($0.02) - ($0.00)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
$0.06
|
|
|
|
|
Stock-based compensation, net of taxes
|
$0.11
|
|
|
||
Other non-GAAP adjustments, net of taxes
|
$0.12
|
|
|
||
Non-GAAP diluted earnings per share range
|
$0.27 - $0.29
|
|
--
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, please see Appendix A.
|
|||||
|
|
|
|
|
|
(2) Growth rates are calculated using prior period GAAP revenue which was the same as non-GAAP revenue.
|
|||||
(3) Management refers to growth rates adjusting for currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these fluctuations. We compare the percent change of the results from one period to another period in order to provide a consistent framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the actual exchange rates in effect during the respective prior periods.
|
|||||
|
|
|
|
|
|
(4) The total percentages may not add due to rounding.
|
SYMANTEC CORPORATION
|
|||||
Guidance and Reconciliation of GAAP to Non-GAAP Revenue, Operating Margin and Earnings Per Share (1)
|
|||||
(Dollars in millions, except per share data, unaudited)
|
|||||
|
|
|
|
|
|
Fiscal Year 2017
|
|||||
Revenue Guidance
|
Year Ended March 31, 2017
|
||||
|
|
Year-Over-Year Growth Rate (2)
|
|||
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
GAAP revenue range
|
$3,925 - $4,005
|
|
9% - 11%
|
|
7% - 10%
|
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
$115
|
|
3%
|
|
3%
|
Non-GAAP revenue range (4)
|
$4,040 - $4,120
|
|
12% - 14%
|
|
11% - 13%
|
|
Year Ended March 31, 2017
|
||||
|
|
|
Year-Over-Year Increase
|
||
Operating Margin Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP operating margin
|
1% - 3%
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
2%
|
|
|
|
|
Stock-based compensation
|
8%
|
|
|
|
|
Other non-GAAP adjustments
|
16%
|
|
|
|
|
Non-GAAP operating margin
|
27% - 29%
|
|
--
|
||
|
Year Ended March 31, 2017
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
($0.07) - ($0.01)
|
|
--
|
||
Add back:
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
$0.14
|
|
|
|
|
Stock-based compensation, net of taxes
|
$0.36
|
|
|
||
Other non-GAAP adjustments, net of taxes
|
$0.69
|
|
|
||
Non-GAAP diluted earnings per share range
|
$1.12 - $1.18
|
|
--
|
||
|
Year Ended March 30, 2018
|
||||
|
|
|
Year-Over-Year Growth Rate
|
||
Earnings Per Share Guidance and Reconciliation
|
Range
|
|
Actual
|
||
GAAP diluted earnings per share range
|
$0.48 - $0.58
|
|
--
|
||
Add back:
|
|
|
|
|
|
Non-GAAP adjustments
|
$1.22
|
|
|
||
Non-GAAP diluted earnings per share range
|
$1.70 - $1.80
|
|
--
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, please see Appendix A.
|
|||||
|
|
|
|
|
|
(2) Growth rates are calculated using prior period GAAP revenue which was the same as non-GAAP revenue.
|
|||||
(3) Management refers to growth rates adjusting for currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these fluctuations. We compare the percent change of the results from one period to another period in order to provide a consistent framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the actual exchange rates in effect during the respective prior periods.
|
|||||
|
|
|
|
|
|
(4) The total percentages may not add due to rounding.
|