Gen Digital Inc. · NASDAQ:GEN
Gen Digital — NortonLifeLock — Q2 2022 Earnings Presentation
32 slides from Gen Digital's earnings presentation, Nov 4, 2021
Slide 1: Fiscal 2022 Q2 Earnings
Add new image NO VEMBER 4, 2021 FISCAL 2022 Q2 EARNINGS Copyright © 2021 NortonLifeLock Inc. All rights reserved.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This supplemental information contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws. In some cases, you can identify these forward-looking statements by the use of terms such as “expect,” “will,” “continue,” or s
Slide 3: Our vision is to protect and empower people to live their digital lives safely
Our vision is to protect and empower people to live their digital lives safely Fiscal 2022 Q2 Total Users Direct Customers ~80M 23M+ Copyright © 2021 NortonLifeLock Inc. All rights reserved. Copyright © 2021 NortonLifeLock Inc. All rights reserved. reserved. 3 3
Slide 4: Q2 Non-GAAP Business Highlights
Q2 Non-GAAP Business Highlights • Double-digit Revenue growth, up 11% Y/Y • Strong profitability and continued EPS expansion, up 19% Y/Y • 8th consecutive quarter of growing direct customer count: +178K Q/Q, +2.6M Y/Y Bookings Revenue Op. Margin EPS +7% Y/Y (USD & CC) +11% Y/Y (USD & CC) +200 bps Y/
Slide 5: What's New
What’s New Copyright © 2021 NortonLifeLock Inc. All rights reserved. 5
Slide 6: Norton AntiTrack
Norton AntiTrack An all-new privacy offering, Norton AntiTrack helps people protect their digital footprints from companies and websites that track online activity and collect personal data. It’s a new app and browser extension that helps prevent websites from tracking and profiling users in ways no
Slide 7: New Family Plan Features Added to Boost Safety
New Family Plan Features Added to Boost Safety New location-based features provide parents with enhanced supervision capabilities: Favorite Locations: Helps parents establish approved geographic locations as favorite locations. Once set, parents will receive notifications when their child’s device a
Slide 8: Norton Utilities Ultimate
Norton Utilities Ultimate New offering optimizes Windows PC performance for faster, smoother and more secure Internet browsing and connection Enhanced features: • NetBooster: Optimizes internet settings to identify bandwidth-clogging devices, and speed up videos, downloads and games. • System Restor
Slide 9: 2021 ESG Report
2021 ESG Report We bring together our team, expertise, and powerful technology to support environmental, social, and governance (ESG) priorities that build a safe, inclusive, and sustainable future. Our commitment to Corporate Responsibility is a critical anchor of our company vision and mission Cop
Slide 10: Financial Results
Financial Results Copyright © 2021 NortonLifeLock Inc. All rights reserved.
Slide 11: Q2 Results Reflect Consistent Growth Momentum
Q2 Results Reflect Consistent Growth Momentum $695M As Non-GAAP P&L Q2 Q1 Q2 Reported REVENUE Dollars in millions, except per share amounts FY21 FY22 FY22 Y/ Y Up 11% Y/Y in USD & CC Revenue $626 $691 $695 11% Continued double-digit growth, Gross Profit 544 599 607 12% broad-based across products Gr
Slide 12: 8th Consecutive Quarter of Net Customer Adds
8 th Consecutive Quarter of Net Customer Adds Consumer Metrics Dollars in millions, except ARPU in dollars Q2 Q1 Q2 Growth Growth Direct Customer Count Q/Q +178K (Non-GAAP) FY21 FY22 FY22 Y/Y Q/Q Ending customer count, millions Revenue $626 $691 $695 11% 1% Y/Y +2.6M Direct Customer Revenue $563 $61
Slide 13: Operational Efficiencies Drove Margin Expansion
Operational Efficiencies Drove Margin Expansion 52.2% Trended Operating Margin OPERATING MARGIN Non-GAAP Up 200 bps Y/Y Q2 FY22 G&A efficiencies deployed towards 51.0% 52.2% 50% investments in the product portfolio 50.2% 50.5% 51.2% 47.1% and performance marketing % of revenue: 87% Gross Margin 21%
Slide 14: Healthy Balance Sheet and Stable Cash Flow
Healthy Balance Sheet $1.5B+ CASH ON HAND and Stable Cash Flow Strong total liquidity position Includes $355M cash proceeds from sale of Mountain View property (July 2021) Key Balance Sheet, Q2 Q1 Q2 Cash Flow & Other Metrics FY21 FY22 FY22 Dollars in millions Balance Sheet CURRENT LEVERAGE LEVELS C
Slide 15: Q3 Fiscal 2022 Non-GAAP Guidance
Q3 Fiscal 2022 Non-GAAP Guidance REVENUE EPS $695M - $705M $0.42 - $0.44 9% - 11% growth Y/Y (CC) Assumes stable currency rates Q/Q Note: All numbers presented are non-GAAP unless otherwise indicated. - Y/Y revenue growth in constant currency. - Assumes current effective tax rate. - We are not provi
Slide 16: Full Year Fiscal 2022 Non-GAAP Guidance
Full Year Fiscal 2022 Non-GAAP Guidance Narrowed to High-End of Prior Range REVENUE GROWTH EPS 9% - 10% $1.70 - $1.75 in constant currency (Previously $1.65 - $1.75) (Previously 8% - 10%+) Note: All numbers presented are non-GAAP unless otherwise indicated. - Y/Y revenue growth in constant currency.
Slide 17: Appendix
Appendix Copyright © 2021 NortonLifeLock Inc. All rights reserved.
Slide 18: Trended Non-GAAP Quarterly Results
Trended Non-GAAP Quarterly Results Non-GAAP P&L Q1 Q2 Q3 Q4 Q1 Q2 (Continuing Operations) FY21 FY21 FY21 FY21 FY21 FY22 FY22 Dollars in millions, except per share amounts Total Revenue $614 $626 $639 $677 $2,556 $691 $695 Gross Profit 535 544 558 589 2,226 599 607 Gross Margin 87.1% 86.9% 87.3% 87.0
Slide 19: Reconciliation to Non-GAAP Gross Profit
Reconciliation to Non-GAAP Gross Profit GAAP to Non-GAAP Gross Profit Q1 Q2 Q3 Q4 Q1 Q2 FY21 FY22 Dollars in millions FY21 FY21 FY21 FY21 FY22 GAAP Results of Operation Gross profit (GAAP) $528 $536 $552 $573 $2,189 $584 $592 Non-GAAP Gross Profit Adjustments Net revenues Contract liabilities fair v
Slide 20: Reconciliation to Non-GAAP Operating Income
Reconciliation to Non-GAAP Operating Income GAAP to Non-GAAP Operating Income Q1 Q2 Q3 Q4 Q1 Q2 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 GAAP Results of Operation Operating income (GAAP) $120 $230 $280 $266 $896 $287 $287 Total Non-GAAP gross profit adjustment 7 8 6 16 37 15 15 Non-GAA
Slide 21: Reconciliation to Non-GAAP Net Income
Reconciliation to Non-GAAP Net Income GAAP to Non-GAAP Net Income Q1 Q2 Q3 Q4 Q1 Q2 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 G AAP Results of Operation Net income (GAAP) $118 $64 $178 $194 $554 $181 $333 Total Non-GAAP gross profit adjustment 7 8 6 16 37 15 15 Total Non-GAAP operating
Slide 22: Q2 GAAP to Non-GAAP Reconciliation
Q2 GAAP to Non-GAAP Reconciliation Bridge from GAAP to Non-GAAP EPS Q2 FY22 and Net Income from Cont. Ops Dollars in millions, except per share amounts EPS Net Income G AAP EPS / Net Income from Cont. Ops $0.56 $333 Contract liabilities fair value adjustment 0.01 3 Stock Based Compensation 0.02 13 A
Slide 23: Trended Contract Liabilities, Bookings, and Reported Billings
Trended Contract Liabilities, Bookings, and Reported Billings Contract Liabilities, Q1 Q2 Q3 Q4 Q1 Q2 Bookings, and Reported Billings FY21 FY21 FY21 FY21 FY21 FY22 FY22 Dollars in millions Contract Liabilities $1,058 $1,074 $1,135 $1,265 $1,265 $1,231 $1,213 Y/Y Growth 5% 6% 8% 18% 18% 16% 13% Booki
Slide 24: Trended Share Count
Trended Share Count Diluted Share Count Q1 Q2 Q3 Q4 Q1 Q2 FY21 Shares in millions FY21 FY21 FY21 FY21 FY22 FY22 Basic Share Count Weighted Average 590 592 593 582 589 580 582 D ilutive Potentially Issuable Shares: From Employee Equity Awards 4 3 1 2 3 4 2 From Convertible Debt 20 5 3 4 8 7 7 D ilute
Slide 25: Trended Stock Based Compensation
Trended Stock Based Compensation Stock-Based Compensation Q1 Q2 Q3 Q4 Q1 Q2 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 Cost of revenues $- $1 $- $- $1 $- $1 Sales and marketing 4 5 5 4 18 5 3 Research and development 6 7 8 5 26 6 3 General and administrative 8 6 7 5 26 9 6 Restructuring
Slide 26: Trended EBITDA (Non-GAAP)
Trended EBITDA (Non-GAAP) Reported EBITDA (Non-GAAP) (1) Q1 Q2 Q3 Q4 Q1 Q2 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 Net income $118 $64 $178 $194 $ 554 $181 $333 Adjustments: (Income) loss from discontinued operations 31 102 (5) 14 142 - - Net interest expense 38 36 32 34 140 32 31 Inc
Slide 27: Reported EBITDA and Adjusted Debt Covenant EBITDA (Non-GAAP)
Reported EBITDA and Adjusted Debt Covenant EBITDA (Non-GAAP) Reported EBITDA and Adjusted Debt Covenant EBITDA (Non-GAAP) (1) LTM (3) Dollars in millions N e t income $886 Adjustments: (Income) loss from discontinued operations 9 Net interest expense 129 Income tax expense (benefit) 332 Depreciation
Slide 28: Use of GAAP and Non-GAAP Financial Information
Use of GAAP and Non-GAAP Financial Information To assist our readers understand our past financial performance and our projected future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures.
Slide 29: Explanation of Non-GAAP Measures and Other Items
Explanation of Non-GAAP Measures and Other Items Bookings: Bookings are defined as customer orders received that are expected to generate net revenues in the future. We present the operational metric of bookings because it reflects customers' demand for our products and services and to assist reader
Slide 30: UK Takeover Code: Profit Forecast disclosures
UK Takeover Code: Profit Forecast disclosures U K Takeover Code On August 10, 2021, the boards of NortonLifeLock Inc. (“NortonLifeLock”) and Avast plc (“Avast”) announced that they had reached agreement on the terms of a recommended merger of Avast with NortonLifeLock, in the form of a recommended o
Slide 31: UK Takeover Code: Profit Forecast disclosures (Cont'd)
UK Takeover Code: Profit Forecast disclosures (Cont’d) Factors outside the influence or control of the NortonLifeLock Directors (Cont’d) • There will be no material changes in legislation or regulatory requirements impacting onNortonLifeLock’s operations or its accounting policies. • There will be n
Slide 32: NortonLifeLock
SG NortonLifeLock