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Can Symantec Maintain Strong Growth in Its Billings?

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Factors influencing billings

Symantec (SYMC) has reported improvement in its billings growth in the last five quarters, triggered by the acquisition of Blue Coat Systems and LifeLock. These acquisitions are driving the company’s enterprise security billings. The company enjoyed strong billings growth in its Enterprise Security and Consumer Digital Safety segments.

The strong demand for web security services in the enterprise space is driven by booming Internet usage and the growing popularity of the BYOD (bring your own device) concept in various enterprises. 

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Growing global cyber threats also led to higher billings for Symantec. In the last five quarters, the company’s total billings increased at a CAGR (compound annual growth rate) of 4.0%. The billings from the Enterprise Security and Consumer Digital Safety segments grew at compound annual growth rates of 3.0% and 5.0%, respectively.

Headwinds

From the graph above, we can see the billings growth of these segments in the last five quarters. These segments trended upward, with strong growth in the third and fourth quarters due to seasonal trends. 

In fiscal Q4 2018, Symantec’s total billings increased 17.1% YoY to $1.6 billion. The billings from the Enterprise Security segment stood at $937.0 million, up 14.0% YoY. The billings from its Consumer Digital Safety segment rose 22.0% YoY to $661.0 million.

However, softness in the PC market may impact the company’s billings growth. Stiff competition from other security service providers such as FireEye (FEYE) and Fortinet (FTNT) may impact Symantec’s billings.

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