BusinessWire

NortonLifeLock Delivers Better-Than-Expected Fiscal Fourth Quarter 2020 Results

Second consecutive quarter of sequential customer growth and bookings growth of 4% year-over-year

TEMPE, Ariz.--(BUSINESS WIRE)--NortonLifeLock Inc. (NASDAQ: NLOK), a global leader in consumer Cyber Safety, today reported results for its fourth quarter fiscal year 2020 which ended April 3, 2020.


Fourth Quarter GAAP Financial Highlights from Continuing Operations

  • Revenue was $614 million, compared to $617 million a year ago
  • GAAP diluted EPS was $0.23, compared to $0.06 a year ago

Fourth Quarter Operational and Non-GAAP Financial Highlights from Continuing Operations

  • Consumer revenue was $610 million, up 1% year-over-year in constant currency
  • Non-GAAP diluted EPS was $0.26, compared to $0.16 a year ago, up 63% year-over-year
  • Consumer reported billings growth of 3% year-over-year
  • Average revenue per user of $9.07, up 3% year-over-year

“In only our second quarter as NortonLifeLock, we drove better than expected results on both the top and bottom lines as we turned our focus to driving sustainable growth. With consumer bookings up 4% year-over-year and another quarter of sequential customer growth, consumers are seeing the value we provide in protecting their digital lives as they live more and more online,” said Vincent Pilette, CEO of NortonLifeLock. “I am extremely proud of how we supported our customers during this COVID-19 crisis and how we are laying the foundation for long term growth.”

Transition to a Pure-Play Consumer Company Nearly Complete

NortonLifeLock’s transition to a pure-play consumer company continued at a fast pace with over 70% of stranded cost removal completed within five months. Total stranded costs eliminated through the transition is estimated to be less than $1 billion, of which $750 million are cash costs. The cash costs are more than offset by an estimated $1.5 billion of cash inflow from sales of underutilized assets, half of which has already been realized.

Returned $9 Billion to Investors and Ending Cash Balance of $2.3 Billion

NortonLifeLock returned $9 billion to investors during the quarter, including the special dividend, regular dividend, share repurchase, and convertible note retirement. With $2.3 billon of cash and no debt maturities until the end of our fiscal year 2022, the company is well positioned to invest in expanding its portfolio to serve the cyber safety needs of everyone.

First Quarter Fiscal Year 2021 Guidance

  • Revenue in the range of $590 to $605 million, 0 to 2% growth adjusting for extra week ($44 million) and ID Analytics revenue ($14 million) in first quarter fiscal year 2020
  • Non-GAAP EPS in the range of $0.18 to $0.22

NortonLifeLock’s Board of Directors has declared a quarterly cash dividend of $0.125 per common share to be paid on June 24, 2020 to all shareholders of record as of the close of business on June 10, 2020.

To help readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The methods we use to produce non-GAAP results are not in accordance with GAAP and may differ from the methods used by other companies. Additional information regarding our non-GAAP measures are provided below. No reconciliation of the forecasted range for non-GAAP EPS guidance is included in this release because it would be unreasonably burdensome to forecast the impacts of significant changes in our business such as restructuring activities related to the sale of our enterprise business.

For additional details regarding NortonLifeLock’s results and outlook, please see the Earnings Presentation and the Supplemental Information on the investor relations page of our website at: http://investor.nortonlifelock.com

Conference Call

NortonLifeLock has scheduled a conference call for 5:00 p.m. ET / 2:00 p.m. PT today to discuss its results for its fourth quarter fiscal year 2020 ended April 3, 2020 and to review guidance. Interested parties may access the conference call by dialing (877) 475-6198 or (970) 297-2372 and using conference ID 3595969. A live audio webcast of the conference call will also be available through NortonLifeLock's Investor Relations website at http://investor.nortonlifelock.com/investor-relations/events-calendar/.

A replay and our prepared remarks will be available on the investor relations home page shortly after the call is completed.

About NortonLifeLock

NortonLifeLock Inc. (NASDAQ: NLOK) is a global leader in consumer Cyber Safety. NortonLifeLock is dedicated to helping secure the devices, identities, online privacy, and home and family needs of nearly 50 million consumers, providing them with a trusted ally in a complex digital world. For more information, please visit www.NortonLifeLock.com.

Forward-Looking Statements:

This press release 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 expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to: the statements under “First Quarter Fiscal Year 2021 Guidance,” including expectations relating to operating margin and annualized EPS; the effects of the sale of substantially all of the Enterprise Security business on the Company’s business; the timing and amount of stock repurchases; the long-term operating model of NortonLifeLock; NortonLifeLock’s future revenue growth and cash flow from operations; statements regarding expectations of the recurring nature of consumer subscriptions; statements regarding the compliance with our debt instruments and covenants thereunder; the estimated amount and character of, and time to eliminate, stranded costs; the estimated unrealized cost savings from estimates of future results; the estimated amount, and the Company’s ability to monetize and use the proceeds of sales, of underutilized assets; any other statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include, but are not limited to, those related to: the current and future impact of the COVID-19 pandemic on the Company’s business and industry; the effect of the sale of substantially all of the Enterprise Security assets on NortonLifeLock’s retained businesses and products; retention of existing executive leadership team members; difficulties in improving sales and product development during leadership transitions; difficulties in executing the operating model for the consumer cyber safety business; lower than anticipated returns from the Company's investments in direct customer acquisition; difficulties and delays in reducing run rate expenses and monetizing underutilized assets; general business and economic conditions; matters arising out of our completed Audit Committee investigation and the ongoing U.S. Securities and Exchange Commission investigation; fluctuations and volatility in NortonLifeLock’s stock price; the ability of NortonLifeLock to successfully execute strategic plans; the ability to maintain customer and partner relationships; the ability of NortonLifeLock to achieve its cost and operating efficiency goals; the anticipated growth of certain market segments; NortonLifeLock’s sales and business strategy; fluctuations in tax rates and foreign currency exchange rates; the timing and market acceptance of new product releases and upgrades; and the successful development of new products and the degree to which these products gain market acceptance. Additional information concerning these and other risk factors is contained in the Risk Factors sections of NortonLifeLock’s most recent reports on Form 10-K and Form 10-Q. NortonLifeLock assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments.

Use of Non-GAAP Financial Information:

We use non-GAAP measures of operating margin, net income and earnings per share, which are adjusted from results based on GAAP and exclude certain expenses, gains and losses. We also provide the non-GAAP metrics of Consumer revenues, constant currency revenues and Consumer reported billings, which exclude revenues from our divested ID Analytics solutions. These non-GAAP financial measures are provided to enhance the user’s understanding of our past financial performance and our prospects for the future. Our management team uses these non-GAAP financial measures in assessing NortonLifeLock’s performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Readers are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information including the Supplemental Information, on the investor relations page of our website at: http://investor.nortonlifelock.com.

NORTONLIFELOCK INC.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

 

April 3, 2020

 

March 29, 2019

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

2,177

 

 

$

1,791

 

Short-term investments

86

 

 

252

 

Accounts receivable, net

111

 

 

708

 

Assets held for sale

270

 

 

 

Other current assets

435

 

 

286

 

Current assets of discontinued operations

 

 

149

 

Total current assets

3,079

 

 

3,186

 

Property and equipment, net

238

 

 

663

 

Operating lease assets

88

 

 

 

Intangible assets, net

1,067

 

 

1,202

 

Goodwill

2,585

 

 

2,677

 

Other long-term assets

678

 

 

1,160

 

Long-term assets of discontinued operations

 

 

7,050

 

Total assets

$

7,735

 

 

$

15,938

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

87

 

 

$

165

 

Accrued compensation and benefits

115

 

 

250

 

Current portion of long-term debt

756

 

 

491

 

Contract liabilities

1,049

 

 

1,032

 

Current operating lease liabilities

28

 

 

 

Other current liabilities

587

 

 

524

 

Current liabilities of discontinued operations

 

 

1,304

 

Total current liabilities

2,622

 

 

3,766

 

Long-term debt

3,465

 

 

3,961

 

Long-term contract liabilities

27

 

 

27

 

Deferred income tax liabilities

149

 

 

577

 

Long-term income taxes payable

1,310

 

 

1,076

 

Long-term operating lease liabilities

73

 

 

 

Other long-term liabilities

79

 

 

78

 

Long-term liabilities of discontinued operations

 

 

715

 

Total liabilities

7,725

 

 

10,200

 

Total stockholders’ equity

10

 

 

5,738

 

Total liabilities and stockholders’ equity

$

7,735

 

 

$

15,938

 

NORTONLIFELOCK INC.

Condensed Consolidated Statements of Operations (1)

(In millions, except per share data, unaudited)

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

March 29,
2019

 

April 3,
2020

 

March 29,
2019

Net revenues

$

614

 

 

$

617

 

 

$

2,490

 

 

$

2,456

 

Cost of revenues

97

 

 

124

 

 

393

 

 

455

 

Gross profit

517

 

 

493

 

 

2,097

 

 

2,001

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

150

 

 

175

 

 

701

 

 

712

 

Research and development

70

 

 

98

 

 

328

 

 

420

 

General and administrative

97

 

 

93

 

 

368

 

 

410

 

Amortization of intangible assets

18

 

 

21

 

 

79

 

 

80

 

Restructuring, transition and other costs

138

 

 

34

 

 

266

 

 

221

 

Total operating expenses

473

 

 

421

 

 

1,742

 

 

1,843

 

Operating income

44

 

 

72

 

 

355

 

 

158

 

Interest expense

(50

)

 

(51

)

 

(196

)

 

(208

)

Other income (expense), net

263

 

 

(1

)

 

660

 

 

(57

)

Income (loss) from continuing operations before income taxes

257

 

 

20

 

 

819

 

 

(107

)

Income tax expense (benefit)

108

 

 

(17

)

 

241

 

 

3

 

Income (loss) from continuing operations

149

 

 

37

 

 

578

 

 

(110

)

Income (loss) from discontinued operations

82

 

 

(3

)

 

3,309

 

 

141

 

Net income

$

231

 

 

$

34

 

 

$

3,887

 

 

$

31

 

 

 

 

 

 

 

 

 

Income (loss) per share - basic:

 

 

 

 

 

 

 

Continuing operations

$

0.25

 

 

$

0.06

 

 

$

0.94

 

 

$

(0.17

)

Discontinued operations

$

0.14

 

 

$

 

 

$

5.38

 

 

$

0.22

 

Net income (loss) per share - basic (2)

$

0.39

 

 

$

0.05

 

 

$

6.32

 

 

$

0.05

 

 

 

 

 

 

 

 

 

Income (loss) per share - diluted:

 

 

 

 

 

 

 

Continuing operations

$

0.23

 

 

$

0.06

 

 

$

0.90

 

 

$

(0.17

)

Discontinued operations

$

0.13

 

 

$

 

 

$

5.15

 

 

$

0.22

 

Net income (loss) per share - diluted (2)

$

0.36

 

 

$

0.05

 

 

$

6.05

 

 

$

0.05

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

599

 

 

637

 

 

615

 

 

632

 

Diluted

639

 

 

662

 

 

643

 

 

632

 

(1)

The year ended April 3, 2020 consisted of 53 weeks whereas the year ended March 29, 2019 consisted of 52 weeks. The impact of the extra week on revenues in the year ended April 3, 2020 is estimated to be approximately $44 million.

(2)

Amounts may not add due to rounding.

NORTONLIFELOCK INC.

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

 

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

March 29,
2019

 

April 3,
2020

 

March 29,
2019

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income

$

231

 

 

$

34

 

 

$

3,887

 

 

$

31

 

Adjustments:

 

 

 

 

 

 

 

Amortization and depreciation

54

 

 

158

 

 

361

 

 

615

 

Impairments of long-lived assets

42

 

 

2

 

 

74

 

 

10

 

Stock-based compensation expense

42

 

 

87

 

 

312

 

 

352

 

Loss from equity interest

 

 

17

 

 

31

 

 

101

 

Deferred income taxes

2

 

 

(52

)

 

16

 

 

(70

)

Gain on divestitures

(262

)

 

 

 

(5,684

)

 

 

Gain on sale of equity method investment

 

 

 

 

(379

)

 

 

Non-cash operating lease expense

8

 

 

 

 

40

 

 

 

Other

(31

)

 

18

 

 

(4

)

 

(14

)

Changes in operating assets and liabilities, net of acquisitions and divestitures:

 

 

 

 

 

 

 

Accounts receivable, net

46

 

 

16

 

 

583

 

 

113

 

Accounts payable

(40

)

 

(29

)

 

(61

)

 

6

 

Accrued compensation and benefits

(18

)

 

28

 

 

(117

)

 

2

 

Contract liabilities

42

 

 

137

 

 

(121

)

 

196

 

Income taxes payable

(1,713

)

 

84

 

 

383

 

 

67

 

Other assets

13

 

 

(27

)

 

(81

)

 

(26

)

Other liabilities

(182

)

 

74

 

 

(101

)

 

112

 

Net cash provided by (used in) operating activities

(1,766

)

 

547

 

 

(861

)

 

1,495

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchases of property and equipment

(3

)

 

(54

)

 

(89

)

 

(207

)

Payments for acquisitions, net of cash acquired

 

 

(139

)

 

 

 

(180

)

Proceeds from divestitures, net of cash contributed and transaction costs

346

 

 

 

 

10,918

 

 

 

Proceeds from maturities and sales of short-term investments

32

 

 

20

 

 

167

 

 

139

 

Proceeds from sale of property

 

 

 

 

 

 

26

 

Proceeds from sale of equity method investment

2

 

 

 

 

380

 

 

 

Other

11

 

 

(7

)

 

3

 

 

(19

)

Net cash provided by (used in) investing activities

388

 

 

(180

)

 

11,379

 

 

(241

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Repayments of debt

(566

)

 

(600

)

 

(868

)

 

(600

)

Proceeds from issuance of debt, net of issuance costs

 

 

 

 

300

 

 

 

Net proceeds from sales of common stock under employee stock incentive plans

14

 

 

11

 

 

123

 

 

19

 

Tax payments related to restricted stock units

(7

)

 

(5

)

 

(78

)

 

(173

)

Dividends and dividend equivalents paid

(7,304

)

 

(48

)

 

(7,481

)

 

(217

)

Repurchases of common stock

(677

)

 

(234

)

 

(1,581

)

 

(234

)

Cash consideration paid in the exchange of Convertible Notes

(546

)

 

 

 

(546

)

 

 

Short-swing profit disgorgement

 

 

 

 

9

 

 

 

Other

 

 

(4

)

 

(1

)

 

(4

)

Net cash used in financing activities

(9,086

)

 

(880

)

 

(10,123

)

 

(1,209

)

Effect of exchange rate fluctuations on cash and cash equivalents

(8

)

 

(5

)

 

(9

)

 

(28

)

Change in cash and cash equivalents

(10,472

)

 

(518

)

 

386

 

 

17

 

Beginning cash and cash equivalents

12,649

 

 

2,309

 

 

1,791

 

 

1,774

 

Ending cash and cash equivalents

$

2,177

 

 

$

1,791

 

 

$

2,177

 

 

$

1,791

 

NORTONLIFELOCK INC.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (2)

(In millions, except per share data, unaudited)

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

March 29,
2019

 

April 3,
2020

 

March 29,
2019

Operating income

$

44

 

 

$

72

 

 

$

355

 

 

$

158

 

Stock-based compensation

28

 

 

33

 

 

119

 

 

158

 

Amortization of intangible assets

25

 

 

28

 

 

109

 

 

110

 

Restructuring, transition and other costs

138

 

 

34

 

 

266

 

 

221

 

Litigation settlement loss

20

 

 

 

 

20

 

 

 

Other

 

 

1

 

 

 

 

(2

)

Operating income (Non-GAAP)

$

255

 

 

$

168

 

 

$

869

 

 

$

646

 

 

 

 

 

 

 

 

 

Operating margin

7.2

%

 

11.7

%

 

14.3

%

 

6.4

%

Operating margin (Non-GAAP)

41.5

%

 

27.2

%

 

34.9

%

 

26.3

%

 

 

 

 

 

 

 

 

Net income

$

231

 

 

$

34

 

 

$

3,887

 

 

$

31

 

Adjustments to income from continuing operations:

 

 

 

 

 

 

 

Stock-based compensation

26

 

 

33

 

 

120

 

 

158

 

Amortization of intangible assets

25

 

 

28

 

 

109

 

 

110

 

Restructuring, transition and other costs

138

 

 

34

 

 

266

 

 

221

 

Litigation settlement charges (benefit)

20

 

 

 

 

20

 

 

(5

)

Other

(1

)

 

1

 

 

(1

)

 

3

 

Non-cash interest expense

5

 

 

7

 

 

23

 

 

25

 

Gains on divestiture and sale of equity method investment

(250

)

 

 

 

(629

)

 

 

Loss from equity interest

 

 

17

 

 

31

 

 

101

 

Total adjustments to GAAP income from continuing operations before income taxes

(38

)

 

121

 

 

(61

)

 

614

 

Adjustment to GAAP provision for income taxes

56

 

 

(49

)

 

59

 

 

(110

)

Total adjustment to continuing operations, net of taxes

18

 

 

72

 

 

(2

)

 

504

 

Discontinued operations

(82

)

 

3

 

 

(3,309

)

 

(141

)

Net income (Non-GAAP)

$

167

 

 

$

109

 

 

$

576

 

 

$

395

 

 

 

 

 

 

 

 

 

Diluted net income per share

$

0.36

 

 

$

0.05

 

 

$

6.05

 

 

$

0.05

 

Adjustments to diluted net income per share:

 

 

 

 

 

 

 

Stock-based compensation

0.04

 

 

0.05

 

 

0.19

 

 

0.25

 

Amortization of intangible assets

0.04

 

 

0.04

 

 

0.17

 

 

0.17

 

Restructuring, transition and other costs

0.22

 

 

0.05

 

 

0.41

 

 

0.35

 

Litigation settlement charges (benefit)

0.03

 

 

 

 

0.03

 

 

(0.01

)

Other

 

 

 

 

 

 

 

Non-cash interest expense

0.01

 

 

0.01

 

 

0.04

 

 

0.04

 

Gains on divestiture and sale of equity method investment

(0.39

)

 

 

 

(0.98

)

 

 

Loss from equity interest

 

 

0.03

 

 

0.05

 

 

0.16

 

Total adjustments to GAAP income from continuing operations before income taxes

(0.06

)

 

0.18

 

 

(0.09

)

 

0.97

 

Adjustment to GAAP provision for income taxes

0.09

 

 

(0.07

)

 

0.09

 

 

(0.17

)

Total adjustment to continuing operations, net of taxes

0.03

 

 

0.11

 

 

(0.00

)

 

0.80

 

Discontinued operations

(0.13

)

 

0.00

 

 

(5.15

)

 

(0.22

)

Incremental dilution effect

 

 

 

 

 

 

(0.03

)

Diluted net income per share (Non-GAAP)

$

0.26

 

 

$

0.16

 

 

$

0.90

 

 

$

0.60

 

 

 

 

 

 

 

 

 

Diluted weighted-average shares outstanding

639

 

 

662

 

 

643

 

 

632

 

Incremental dilution

 

 

 

 

 

 

29

 

Diluted weighted-average shares outstanding (Non-GAAP)

639

 

 

662

 

 

643

 

 

661

 

(1)

This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, see Appendix A.

(2)

Amounts may not add due to rounding.

NORTONLIFELOCK INC.

Consumer Revenues, Consumer Reported Billings and Consumer Cyber Safety Metrics

(In millions, except per user data, unaudited)

 

Consumer Revenues (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

March 29,
2019

 

Variance
in %

 

April 3,
2020

 

March 29,
2019

 

Variance
in %

Revenues (1)

$

614

 

 

$

617

 

 

%

 

$

2,490

 

 

$

2,456

 

 

1

%

Exclude revenues from ID Analytics (2)

(4

)

 

(12

)

 

 

 

(46

)

 

(48

)

 

 

Consumer revenues (Non-GAAP)

610

 

 

605

 

 

1

%

 

2,444

 

 

2,408

 

 

1

%

Exclude foreign exchange impact (3)

3

 

 

 

 

 

 

16

 

 

 

 

 

Constant currency adjusted consumer revenues (Non-GAAP)

613

 

 

605

 

 

1

%

 

2,460

 

 

2,408

 

 

2

%

Exclude extra week impact (1)

 

 

 

 

 

 

(44

)

 

 

 

 

Constant currency and extra week adjusted consumer revenues (Non-GAAP)

$

613

 

 

$

605

 

 

1

%

 

$

2,416

 

 

$

2,408

 

 

%

 

Consumer Reported Billings (Non-GAAP)

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

March 29,
2019

 

Variance
in %

 

April 3,
2020

 

March 29,
2019

 

Variance
in %

Revenues (1)

$

614

 

 

$

617

 

 

%

 

$

2,490

 

 

$

2,456

 

 

1

%

Add: Contract liabilities (end of period)

1,076

 

 

1,059

 

 

 

 

1,076

 

 

1,059

 

 

 

Less: Contract liabilities (beginning of period)

(1,047

)

 

(1,046

)

 

 

 

(1,059

)

 

(1,117

)

 

 

Add: Other contract liabilities adjustment (4)

 

 

2

 

 

 

 

5

 

 

2

 

 

 

Reported billings (Non-GAAP)

643

 

 

632

 

 

2

%

 

2,512

 

 

2,400

 

 

5

%

Exclude revenue from ID Analytics (2)

(4

)

 

(12

)

 

 

 

(46

)

 

(48

)

 

 

Consumer reported billings (Non-GAAP)

639

 

 

620

 

 

3

%

 

2,466

 

 

2,352

 

 

5

%

Exclude extra week impact (1)

 

 

 

 

 

 

(44

)

 

 

 

 

Consumer reported billings excluding extra week impact (Non-GAAP)

$

639

 

 

$

620

 

 

3

%

 

$

2,422

 

 

$

2,352

 

 

3

%

Consumer Cyber Safety Metrics

 

Three Months Ended

 

Year Ended

 

April 3,
2020

 

January 3,
2020

 

March 29,
2019

 

April 3,
2020

 

March 29,
2019

Direct customer revenues

$

549

 

 

$

542

 

 

$

541

 

 

$

2,204

 

 

$

2,168

 

Partner revenues

$

61

 

 

$

61

 

 

$

64

 

 

$

240

 

 

$

240

 

Revenues from ID Analytics

$

4

 

 

$

15

 

 

$

12

 

 

$

46

 

 

$

48

 

Average direct customer count

20.2

 

 

20.1

 

 

20.4

 

 

20.2

 

 

20.7

 

Direct customer count (at quarter end)

20.2

 

 

20.1

 

 

20.3

 

 

20.2

 

 

20.3

 

Direct average revenue per user (ARPU) (5)

$

9.07

 

 

$

8.99

 

 

$

8.83

 

 

$

8.90

 

 

$

8.74

 

Consumer Cyber Safety annual retention rate

 

 

 

 

 

 

85

%

 

85

%

(1)

The year ended April 3, 2020 consisted of 53 weeks whereas the year ended March 29, 2019 consisted of 52 weeks. The impact of the extra week on revenues in the year ended April 3, 2020 is estimated to be approximately $44 million.

(2)

In the three months ended April 3, 2020, we divested our ID Analytics solutions and are presenting consumer reported billings and consumer revenues to enhance comparability of the reported billings and revenues of our remaining solutions to the year ago period.

(3)

Calculated using year ago foreign exchange rates.

(4)

Other contract liabilities adjustment for the year ended April 3, 2020 represents the change in contract liabilities related to Veritas discontinued operations of $5 million. Other contract liabilities adjustment for the three months and the year ended March 29, 2019 represents the change in contract liabilities related to Veritas discontinued operations of $2 million and $19 million, respectively. In addition, other contract liabilities adjustment for the year ended March 29, 2019 includes the impact of the adoption of the new revenue recognition standard of $17 million.

(5)

ARPU in the year ended April 3, 2020 was normalized to exclude the impact of the extra week on direct revenue, which we estimate to be approximately $41 million.

NORTONLIFELOCK INC.
Appendix A
Explanation of Non-GAAP Measures and Other Items

Objective of non-GAAP measures: We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management team uses these non-GAAP financial measures in assessing NortonLifeLock’s performance, as well as in planning and forecasting future periods. Due to the importance of these measures in managing the business, we use non-GAAP measures in the evaluation of management’s compensation. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies.


Contacts

MEDIA CONTACT:
Spring Harris
NortonLifeLock Inc.
press@nortonlifelock.com

INVESTOR CONTACT:
Soohwan Kim, CFA
NortonLifeLock Inc.
ir@nortonlifelock.com


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