Gen Digital Inc. · NASDAQ:GEN
Gen Digital — NortonLifeLock — Q3 FY2022 Earnings Presentation
33 slides from Gen Digital's earnings presentation, Feb 3, 2022
Slide 1: Fiscal 2022 Q3 Earnings
Add new image FEBRUARY 3, 2022 FISCAL 2022 Q3 EARNINGS Copyright © 2022 NortonLifeLock Inc. All rights reserved.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 similar expre
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 Q3 Total Users Direct Customers ~80M 23M+ Copyright © 2022 NortonLifeLock Inc. All rights reserved. Copyright © 2021 2022 NortonLifeLock Inc. All rights reserved. 33 3
Slide 4: Q3 Non-GAAP Business Highlights
Q3 Non-GAAP Business Highlights • Double-digit Bookings and Revenue growth, up 11% Y/Y and 12% Y/Y in CC, respectively • Strong profitability and continued EPS expansion, up 16% Y/Y • 9th consecutive quarter of growing direct customer count: +126K Q/Q, +2.4M Y/Y Bookings Revenue Op. Margin EPS +10%
Slide 5: What's New
What’s New Copyright © 2022 NortonLifeLock Inc. All rights reserved.
Slide 6: Norton Cyber Safety Platform Enhancements
Norton 360 Cyber Safety Platform Enhancements 14 Million+ customers on Norton 360 platform Over 60% direct customers protected Copyright © 2022 NortonLifeLock Inc. All rights reserved. 6
Slide 7: Avira Breach Monitor
Avira Breach Monitor Avira security products provide protection against phishing and other scams that can result in data getting into the wrong hands. Avira Breach Monitor actively scans the internet and informs you if your email address is part of a data breach. With Avira Breach Monitor, our users
Slide 8: Continued Global Expansion
Continued Global Expansion Dark web monitoring has bolstered our Identity Norton AntiTrack has strengthened our Privacy offering globally. offering globally, we are now in 23 countries across It’s an all-new privacy offering that helps people protect their Europe and Asia. digital footprints from co
Slide 9: Norton's New Brand Shines a Light on the Company's Vision
Norton’s New Brand Shines a Light on the A brighter look. Company’s Vision A simplified & approachable design. A fresh, but familiar identity. We are a consumer technology brand that is part of everyday digital living. Digital living on the bright side. We are the bright side of a dark problem. Copy
Slide 10: Norton Labs Released Consumer Cyber Safety Pulse Report
Norton Labs Released Consumer Cyber Safety Pulse Report Fourth quarterly report taps into NortonLifeLock’s breadth of threat telemetry to reveal top cybersecurity trends, and a look back on a big year for... • Exploits and breaches • Surging current event related scams • Pervasiveness of online trac
Slide 11: Financial Results
Financial Results Copyright © 2022 NortonLifeLock Inc. All rights reserved.
Slide 12: Q3 Results Reflect Steady and Consistent Growth
Q3 Results Reflect Steady and Consistent Growth $704M As Non-GAAP P&L Q3 Q2 Q3 Reported REVENUE Dollars in millions, except per share amounts FY21 FY22 FY22 Y/Y Up 10% Y/Y in USD & 12% in CC Revenue $639 $695 $704 10% Diversified, broad-based growth Gross Profit 558 607 610 9% across products, chann
Slide 13: 9th Consecutive Quarter of Net Customer Adds
9th Consecutive Quarter of Net Customer Adds Consumer Metrics Dollars in millions, except ARPU in dollars Q3 Q2 Q3 Growth Growth Direct Customer Count Q/Q +126K (Non-GAAP) FY21 FY22 FY22 Y/Y Q/Q Qtr-ending customer count, millions Revenue $639 $695 $704 10% 1% Y/Y +2.4M Direct Customer Revenue $569
Slide 14: Driving Margin Expansion with Disciplined Investments
Driving Margin Expansion with Disciplined Investments 52.8% Trended Operating Margin OPERATING MARGIN Non-GAAP Up 180 bps Y/Y Q3 FY22 Continued cost discipline, with 51.0% 52.2% 52.8% 50% pre-integration planning underway for 50.2% 50.5% 51.2% 47.1% Avast % of revenue: 87% Gross Margin 22% Sales & M
Slide 15: Healthy Balance Sheet and Cash Flow Generation
Healthy Balance Sheet $1.8B CASH ON HAND and Cash Flow Generation Strong total liquidity position Key Balance Sheet, Q3 Q2 Q3 Cash Flow & Other Metrics Dollars in millions FY21 FY22 FY22 CURRENT LEVERAGE LEVELS Balance Sheet Gross debt leverage 2.7x Cash, Cash Equivalents and STI $1,073 $1,541 $1,78
Slide 16: Full Year Fiscal 2022 Non-GAAP Guidance
Full Year Fiscal 2022 Non-GAAP Guidance Narrowed to High End of Prior Range REVENUE EPS $2,795M - $2,805M $1.73 - $1.75 (Original range $1.65 - $1.75) Approximately 10% Y/Y (CC) Assumes stable currency rates Q/Q (Original range 8% - 10%+) Note: All numbers presented are non-GAAP unless otherwise ind
Slide 17: Avast and NortonLifeLock Merger
Avast and NortonLifeLock Merger Projected Timeline + Current expected close* German NLOK Avast anti-trust UK CMA MCO & MSO Merger shareholder shareholder filing review election announced approval approval submitted commenced deadline* Original expected close Oct 19 Nov 12 Dec 2 Jan 12 Jan 28 Feb 23
Slide 18: Appendix
Appendix Copyright © 2022 NortonLifeLock Inc. All rights reserved.
Slide 19: Trended Non-GAAP Quarterly Results
Trended Non-GAAP Quarterly Results Non-GAAP P&L Q1 Q2 Q3 Q4 Q1 Q2 Q3 (Continuing Operations) FY21 FY21 FY21 FY21 FY21 FY22 FY22 FY22 Dollars in millions, except per share amounts Total Revenue $614 $626 $639 $677 $2,556 $691 $695 $704 Gross Profit 535 544 558 589 2,226 599 607 610 Gross Margin 87.1%
Slide 20: Reconciliation to Non-GAAP Gross Profit
Reconciliation to Non-GAAP Gross Profit GAAP to Non-GAAP Gross Profit Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 GAAP Results of Operation Gross profit (GAAP) $528 $536 $552 $573 $2,189 $584 $592 $597 Non-GAAP Gross Profit Adjustments Net revenues Contract liabi
Slide 21: Reconciliation to Non-GAAP Operating Income
Reconciliation to Non-GAAP Operating Income GAAP to Non-GAAP Operating Income Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 GAAP Results of Operation Operating income (GAAP) $120 $230 $280 $266 $896 $287 $287 $302 Total Non-GAAP gross profit adjustment 7 8 6 16 37
Slide 22: Reconciliation to Non-GAAP Net Income
Reconciliation to Non-GAAP Net Income GAAP to Non-GAAP Net Income Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 GAAP Results of Operation Net income (GAAP) $118 $64 $178 $194 $554 $181 $333 $202 Total Non-GAAP gross profit adjustment 7 8 6 16 37 15 15 13 Total Non-
Slide 23: Q3 GAAP to Non-GAAP Reconciliation
Q3 GAAP to Non-GAAP Reconciliation Bridge from GAAP to Non-GAAP EPS Q3 FY22 and Net Income from Cont. Ops Dollars in millions, except per share amounts EPS Net Income GAAP EPS / Net Income from Cont. Ops $0.34 $202 Contract liabilities fair value adjustment 0.00 2 Stock Based Compensation 0.03 18 Am
Slide 24: Trended Contract Liabilities, Bookings, and Reported Billings
Trended Contract Liabilities, Bookings, and Reported Billings Contract Liabilities, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Bookings, and Reported Billings FY21 FY21 FY21 FY21 FY21 FY22 FY22 FY22 Dollars in millions Contract Liabilities $1,058 $1,074 $1,135 $1,265 $1,265 $1,231 $1,213 $1,257 Y/Y Growth 5% 6% 8% 18% 18
Slide 25: Trended Share Count
Trended Share Count Diluted Share Count Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Shares in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 Basic Share Count Weighted Average 590 592 593 582 589 580 582 582 Dilutive Potentially Issuable Shares: From Employee Equity Awards 4 3 1 1 3 4 2 3 From Convertible Debt 20 5 3 4
Slide 26: Trended Stock Based Compensation
Trended Stock Based Compensation Stock-Based Compensation Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 Cost of revenues $- $1 $- $- $1 $- $1 $- Sales and marketing 4 5 5 4 18 5 3 5 Research and development 6 7 8 5 26 6 3 5 General and administrative 8 6 7 5 26 9 6
Slide 27: Trended EBITDA (Non-GAAP)
Trended EBITDA (Non-GAAP) Reported EBITDA (Non-GAAP) (1) Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY21 Dollars in millions FY21 FY21 FY21 FY21 FY22 FY22 FY22 Net income $118 $64 $178 $194 $ 554 $181 $333 $202 Adjustments: (Income) loss from discontinued operations 31 102 (5) 14 142 - - - Net interest expense 38 36 32 3
Slide 28: 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 Net income $910 Adjustments: (Income) loss from discontinued operations 14 Net interest expense 129 Income tax expense (benefit) 311 Depreciation
Slide 29: 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 30: 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 31: UK Takeover Code: Profit Forecast disclosures
UK Takeover Code: Profit Forecast disclosures UK 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 of
Slide 32: 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 adverse events that will have a significant impact on the timing and market acceptance of new product releases and upgrades by NortonLi
Slide 33: SG NortonLifeLock”
SG NortonLifeLock”