Security stalwart Symantec last night reported the results of its fourth quarter, and while revenues of $1.68 billion -- flat, year over year -- were lower than expectations, the company reiterated that the best is yet to come.
It's a time of transition for the company. The company is moving from one lucrative (but now eroding) business, licenses, to a new one: subscriptions. The switch puts pressure on the company's ability to grow, but during its earnings call chief executive Enrique Salem asked for patience from investors as the company reinforces its bids to gain market share in new areas.
"Despite the March quarter results, fiscal year 2012 was a record year for Symantec," Salem said. "We executed on our strategy to strengthen our core businesses, while continuing to grow our emerging businesses. We laid the foundation to capitalize on our key growth initiatives in cloud, mobile and virtualization."
Symantec's fourth quarter bookings were ahead of internal targets and deferred revenue was stronger than expected, Salem said. It ended the fiscal year with $6.73 billion in revenue, up 9 percent year over year.
First, the numbers:
- The consumer group represented 31% of Q4 revenue (up 2% YoY).
- The security/compliance group represented 30% of Q4 revenue (up 8% YoY).
- The storage/servers group represented 35% of Q4 revenue (down 6% YoY).
- The services group represented 4% of Q4 revenue (down 6% YoY).
- Overseas revenue made up 52 percent of the Q4 total (up 4% YoY). The breakdown: EMEA 27% (down 5% YoY), Asia Pacific 19% (up 15%), Americas 54% (down 1%).
Major activity during the quarter:
- Symantec expanded its portfolio of SaaS-delivered offerings; it recently launched O3, a security service for the cloud.
- It introduced multiple mobile application and device management solutions, as well as DLP for tablets.
- It strengthened its partnership with VMware, for backup storage as it pertains to virtualization.
- Revenue continues to trickle in from the Clearwell and LiveOffice acquisitions from last year.
But it's the company's future direction -- with budding enterprise and SMB businesses -- that's most interesting. "We’re continuing to make progress in penetrating the SMB segment where there is more opportunity to grow," Salem said.
Things like user authentication, managed security services and SaaS security services were all driving bookings growth in Q4; the company is also finalizing preparations for stronger cloud and mobile bids after it acquired two mobile companies and launched the aforementioned O3.
"The increasing momentum towards the Linux platform and data center modernization will continue to be the primary opportunity drivers going forward," Salem said. "This [storage management] business generates an important source of cash and profits for the company."
As users access information on an increasing number of devices, and not just ye olde PC, Symantec sees opportunity. That may not please short-term shareholders -- the word "profit" was not mentioned in anyone's prepared remarks -- but it should be interesting to see if Symantec's bets today will pay off tomorrow.
After all, you can't turn a corner without slowing down.