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What Factors Led to 4Q15 Growth in Symantec’s Veritas Segment?

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Veritas: The only segment to report positive growth

On May 14, 2015, Symantec (SYMC) declared its fiscal 4Q15 and 2015 earnings results. In its release, Symantec stated that the company has taken steps to complete the separation of Veritas from its other two operating segments, Enterprise Security and Consumer Security (Norton).

Of all the reporting segments, Veritas was the only one to report growth in 4Q15. Veritas’s non-GAAP (generally accepted accounting principles) revenues grew to $2.56 billion. It was a meager growth of 1% on a year-over-year basis in fiscal 2015. In 4Q15, this segment’s revenues stood at $619 million, an increase of 6% on a year-over-year basis in constant currency terms.

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Enterprise backup drives growth in Information Management segment

In its investor presentation, Symantec claimed that although its appliance subsegment is rapidly gaining its place in the market, until now it has penetrated only 10% of the company’s installed base. In fiscal 4Q15, NetBackup software revenues grew by 11% year-over-year, which was above the overall market growth rate. NetBackup appliances and software thus drove growth in the information segment. However, the enterprise backup contribution was marred by Backup Exec and storage management performance.

Symantec is the leader in backup and recovery software market

As the above graph shows, Symantec leads the backup and recovery software market with 30% market share. It’s followed by EMC (EMC) and IBM (IBM) with 18% and 17% market share, respectively. CommVault and Hewlett-Packard (HPQ) are other leading players in this space.

If you’re bullish about Symantec, you can invest in the PowerShares QQQ Trust ETF (QQQ) to gain exposure to Symantec. QQQ invests about 0.32% of its holdings in Symantec.

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