Strong demand in Symantec's backup, data archiving, data loss prevention and security offerings pushed revenue up 15 percent to $1.65 billion.
Data protection and software management
provider Symantec beat Wall Street analyst expectations for its fiscal first
quarter thanks to strong performance from its security and data storage
Symantec July 27 reported net income of
$172 million, or 22 cents a share, for the fiscal first quarter ended June 30.
Non-GAAP earnings were 40 cents a share, exceeding analyst predictions of
earnings at 37 cents a share.
Symantec saw revenues of $1.65 billion
for quarter, a 15 percent growth from the same period a year ago.
All divisions "executed very
well," and "performance was driven by strength in backup, data loss
prevention, managed security services and consumer," Enrique Salem, CEO of
Symantec, said on the earnings call with analysts.
Enterprise storage and server
management contributed 36 percent of total revenue in the quarter, up 7 percent
over the year-ago period, and Salem is confident the gains will continue.
Symantec generated 281 transactions valued at more than $300,000, and 74
percent included multiple products, James Beer, Symantec's CFO, said on the
earnings call. The company closed 57 deals valued at more than $1 million.
Storage and availability management
percent as Symantec expanded its platform from Sun Solaris and other Unix
platforms to Linux and Windows environments. Salem specifically highlighted
Symantec's successful Red Hat partnership as "we help organizations migrate
Symantec also realized $3 million in
revenue from the Clearwell acquisition
, which closed earlier
than expected on June 24, Beer said.
The consumer business unit remained
unaffected by the industrywide weakness in consumer demand for personal
computers, Salem said.
"The current threat environment is
driving increased awareness for information security," Salem said.
Symantec's Norton security products go beyond the PC to protect users through a
variety of cloud and mobile offerings, he said.
Symantec introduced two new mobile
security applications, Norton Mobile Security for Android 2.0 and an app for
Norton Online Family, during the quarter, but Salem said it is still too early to
see how that market will develop.
Symantec expects to see strong demand
for security and continued growth in storage from enterprises. The
"toxic" threat landscape combined with the phenomenal growth of data
is leading customers to say, "How do I protect all this data that's being
created?" Salem said.
"The combination of those two
trends are absolutely helping Symantec," Salem said.
While competitors may be expanding
endpoint protections, Symantec will focus on the information, such as
identifying users and determining whether they have access to the data, Salem
said in response to an analyst question. "The device to us is
irrelevant," he said, while adding that since customers are still looking
at data loss prevention and managed security services to secure their data,
Symantec will continue offering those products.
The heightened threat landscape also
benefited Symantec's VeriSign Security business
as both the premium
and value SSL (Secure Sockets Layer) offerings gained market share, according
to Salem. In the user authentication business, which includes soft tokens and
Public Key Infrastructure used to verify user and device identity, Symantec has
issued more than 250 million certificates, Salem said, calling it "an
"Our user authentication business
has benefited from increased interest in our solutions as a result of the more
the toxic and targeted threat landscape," Salem said.
Symantec bought VeriSign last year for
Symantec's sales of new licenses grew
for the second consecutive quarter, driven by data loss prevention, archiving
and backup, Beer said on the earnings call. The 4 percent increase in license
revenue indicates strength in potential future business from maintenance and
product upgrades, he said.