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Symantec Foresees Revenue Growth in 2019

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Symantec’s third-quarter revenue

Symantec (SYMC) topped its revenue estimates in the third quarter of fiscal 2019 and grew slightly from the previous year’s quarter. Its revenue of $1.211 billion came in ahead of Wall Street’s expectations by 2.6% and higher than its own guided range of $1.162 billion–$1.19 billion. Its revenue marginally increased from the previous quarter’s $1.209 billion driven by growth in its consumer safety and enterprise security businesses. Its revenue, adjusted for contract liabilities, fell 1.3% YoY (year-over-year) to $1.218 billion in the quarter.

The company saw improvements in its Enterprise Security segment, which had been struggling with challenges related to longer sales cycles in the multiproduct platform and had seen a fall in its implied billings in the second quarter.

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Revenue by segment

The Consumer Digital Safety segment, which accounts for nearly half of the company’s total revenue, delivered revenue of $602 million in the third quarter, up 3.1% YoY. The segment also exceeded Wall Street’s expectation of $600.9 million. Its revenue was aided by the addition of Cyber Safety subscribers related to the Equifax (EFX) breach in 2017. The company also expanded its Cyber Safety platform with the launch of Norton Privacy Manager. The company’s digital safety adoption is likely to get a boost given its strategic partnership with AON, which helps high-worth individuals defend their assets against cybercriminals. In the third quarter, its implied billings were 2.2% higher than in the previous year’s quarter.

In the Enterprise Security segment, the company reported revenue of $609 million in the third quarter, beating analysts’ estimate of $575.6 million backed by a higher-than-expected sales mix of up-front revenue. Its revenue, however, fell 2.6% YoY from the previous year’s quarter. Its implied billings also fell 6.9% YoY to $772 million in the third quarter. Nevertheless, the company seems to be optimistic about the Enterprise Security segment and has thus increased its revenue forecast for the unit for fiscal 2019 backed by its sales capacity and cyber defense leadership.

Symantec expects to see fourth-quarter revenue in the range of $595 million–$605 million for its consumer business and expects its enterprise business revenue to be in the range of $595 million–$615 million.

Peer comparison

Symantec’s peer Microsoft (MSFT) reported its fiscal 2019 second-quarter earnings results on January 30, wherein the software giant beat its earnings estimates but missed on revenue. Oracle’s (ORCL) earnings and revenue both exceeded estimates in its second quarter of fiscal 2019, the results of which the company released on December 17. IBM (IBM) also topped its earnings and revenue estimates in the fourth quarter of 2018. It reported its earnings results on January 22.

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