Strong demand in Symantec's backup, data archiving, data loss prevention and managed security services boosted third-quarter income up 82 percent to $240 million.
"increasingly toxic threat landscape" and "unprecedented
information growth" boosted Symantec's fiscal year third-quarter
performance as enterprises and consumers snapped up security and storage
product bundles designed to protect large volumes of stored data, the company
company reported fiscal third-quarter revenue of $1.7 billion, a 6.9 percent increase
over last year's third-quarter revenue of $1.6 billion. Symantec's net income
was $240 million, or 32 cents a share, for the quarter ended Dec. 31. The
company saw an 82 percent increase in net income over last year's $132 million.
The company exceeded its earnings targets for the sixth consecutive quarter.
Excluding some costs, earnings were 42 cents per share, which beat analyst
strong results were driven by strength in its data loss prevention (DLP),
authentication, managed security services and backup divisions. In fact, the
company saw market share gains by its backup division during this quarter.
Symantec signed "several large transactions" for its NetBackup 5220
appliance during the third quarter, which also displaced established
competitors, Enrique Salem, CEO of Symantec, said during an earnings call.
was driven by the company's "unique ability to provide integrated
deduplication, backup and virtualization solutions in a variety of form
factors," Salem said.
demand will be growing at a rapid rate-close to 50 percent-this year, according
to Salem, driven by the growing amount of data being collected and stored.
Organizations need to be able to deduplicate and manage that whole backup
environment. They also need help thinking about how to protect their
information, which leads to strong demand for DLP and managed services, Salem
cloud businesses are "growing at a faster rate" than its on-premises
offerings, Salem said. The subscription side of the business, which includes
.cloud and VeriSign's authentication business, is expected to grow faster than
sales teams closed 135 deals valued at more than $1 million during the third
quarter, more than double the prior quarter and about 14 percent more than the
comparable period a year ago, Salem said. Of those deals, 41 percent were
storage and security bundles as the sales team focused on cross-selling
products in the company's extensive portfolio, he said.
of just buying archiving, we're going to show you a compelling reason why you
should buy our archiving and our discovery," Salem said.
closed its $115 million acquisition of LiveOffice, a cloud-based archiving
company, this month. The company also acquired Clearwell Systems for $390
million last year. The combination of LiveOffice and Clearwell Systems gives
Symantec the foundation for a data management business that will complement its
existing security and storage portfolio.
expectation is that we'll actually be able to sell a much broader set of
capabilities," Salem said.
Enterprise Security business had a strong quarter as well. Data loss prevention
had strong growth as organizations invested in technology to safeguard their
intellectual property and prevent leakage of their critical data. The Managed
Security Services business closed its largest transaction ever with a global
hospitality company, Salem said.
Security stabilized this quarter after the last few quarters, where it was
"flat to declining," as more customers switched away from competitor
products to Symantec Endpoint Protection 12, Salem said. "Given the work
to integrate McAfee into Intel, we're also seeing opportunity to displace and
gain share across segments against McAfee," he said.
consumer segment for Symantec's PC security software increased only 5 percent
compared with a year earlier. While the company signed a deal to put Norton
Security on Lenovo PCs, fees for factory-installed software fell $8 million
from the previous year. The trend is not expected to change until
"probably the Windows 8 launch," Salem said. Microsoft is expected to
release the latest Windows operating system in the fall.
is looking to boost its services in other areas-such as mobile security for
Android tablets-to move away from its dependency on new PC sales. "I
expect the opportunity to be in these other services as we go beyond the
PC," Salem said.