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NortonLifeLock (NLOK) Q3 Earnings in Line, Revenues Up Y/Y
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NortonLifeLock Inc. reported third-quarter fiscal 2022 non-GAAP earnings of 44 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 16% from the year-ago quarter’s earnings of 38 cents per share.
The company’s quarterly non-GAAP revenues increased 10% year over year to $704 million. The top line came in narrowly below the higher end of management’s guidance of $695-$705 million. Constant currency-adjusted revenues on a non-GAAP basis were $715 million, 12% higher than the year-ago quarter’s reported figure.
Improved customer experiences, diversified product offerings and international business expansion contributed to the double-digit revenue and bookings growth in the quarter under review.
Direct customer revenues increased to $622 million from $569 million reported in the year-ago quarter. Partner revenues improved 17.1% year over year to $82 million.
NortonLifeLock stated that its expected closure for the UK-based Avast merger agreement has accelerated. The company now anticipates the August 2021 deal to close on Feb 24, 2022, much earlier than the original estimate of mid-2022.
NortonLifeLock Inc. Price, Consensus and EPS Surprise
The monthly direct average revenue per user (ARPU) decreased 2.5% on a year-over-year basis to $8.87. Continued stabilization of direct customer count was positive. The quarterly bookings increased by 10% on a year-over-year basis to $752 million.
NortonLifeLock’s direct customer count increased 2.4 million year over year to 23.4 million compared with 23.3 million in the previous quarter. The customer retention rate was slightly above 85% as new initiatives were launched for the improvement of overall retention and within specific products and customer cohorts.
Non-GAAP gross profit climbed 9.3% year over year to $610 million from $558 million. However, gross margin contracted 70 basis points (bps) to 86.6%.
Non-GAAP operating income for the third quarter of fiscal 2022 totaled $372 million, up 14.1% year over year. Non-GAAP operating margin expanded 180 bps to 52.8%.
Non-GAAP EBITDA increased 5.4% year over year to $330 million, while non-GAAP reported EBITDA jumped 13.9% to $376 million.
Balance Sheet & Other Details
NortonLifeLock exited the third quarter with cash and cash equivalents of $1.77 billion compared with the previous quarter’s 1.53 billion. Long-term debt was $2.76 billion, down from $2.78 billion in the previous quarter.
The company generated cash worth $330 million through operating activities in third-quarter fiscal 2022 and $648 million in the first nine months of fiscal 2022. Free cash flow was $328 million in the third quarter and $644 million in the first nine months of fiscal 2022.
NortonLifeLock authorized a quarterly cash dividend of $0.125 per share payable on Mar 16, 2022 to shareholders of record as of Feb 22.
Guidance Update
For the full fiscal 2022, NortonLifeLock anticipates revenues in the band $2,795-$2,805 million. It now expects approximately 10% revenue growth compared with the prior range of 9-10% and the original estimate of 8-10%.
The company raised the lower-end of non-GAAP earnings per share estimate to $1.73-$1.75 compared with the prior estimate of $1.70-$1.75 and the original estimate of $1.65-$1.75.
Zacks Rank & Key Picks
NortonLifeLock currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by 3.6% to $1.43 per share over the past seven days. For fiscal 2022, earnings estimates have moved north by 5.9% to $6.15 per share in the past seven days.
Apple’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 20.3%. AAPL stock has appreciated 25.9% in the past year.
The Zacks Consensus Estimate for Analog Devices’ first-quarter fiscal 2022 earnings has been revised upward by a penny to $1.79 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 7 cents to $7.53 per share in the past 30 days.
Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.1%. Shares of ADI have gained 7.6% in the past year.
The Zacks Consensus Estimate for Axcelis Technologies fourth-quarter 2021 earnings has been revised upward by 16 cents to 84 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 8.5% to $2.67 per share in the last 90 days.
Axcelis’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 24.1%. Shares of ACLS have rallied 63.8% in the past year.
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NortonLifeLock (NLOK) Q3 Earnings in Line, Revenues Up Y/Y
NortonLifeLock Inc. reported third-quarter fiscal 2022 non-GAAP earnings of 44 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 16% from the year-ago quarter’s earnings of 38 cents per share.
The company’s quarterly non-GAAP revenues increased 10% year over year to $704 million. The top line came in narrowly below the higher end of management’s guidance of $695-$705 million. Constant currency-adjusted revenues on a non-GAAP basis were $715 million, 12% higher than the year-ago quarter’s reported figure.
Improved customer experiences, diversified product offerings and international business expansion contributed to the double-digit revenue and bookings growth in the quarter under review.
Direct customer revenues increased to $622 million from $569 million reported in the year-ago quarter. Partner revenues improved 17.1% year over year to $82 million.
NortonLifeLock stated that its expected closure for the UK-based Avast merger agreement has accelerated. The company now anticipates the August 2021 deal to close on Feb 24, 2022, much earlier than the original estimate of mid-2022.
NortonLifeLock Inc. Price, Consensus and EPS Surprise
NortonLifeLock Inc. price-consensus-eps-surprise-chart | NortonLifeLock Inc. Quote
Quarterly Details
The monthly direct average revenue per user (ARPU) decreased 2.5% on a year-over-year basis to $8.87. Continued stabilization of direct customer count was positive. The quarterly bookings increased by 10% on a year-over-year basis to $752 million.
NortonLifeLock’s direct customer count increased 2.4 million year over year to 23.4 million compared with 23.3 million in the previous quarter. The customer retention rate was slightly above 85% as new initiatives were launched for the improvement of overall retention and within specific products and customer cohorts.
Non-GAAP gross profit climbed 9.3% year over year to $610 million from $558 million. However, gross margin contracted 70 basis points (bps) to 86.6%.
Non-GAAP operating income for the third quarter of fiscal 2022 totaled $372 million, up 14.1% year over year. Non-GAAP operating margin expanded 180 bps to 52.8%.
Non-GAAP EBITDA increased 5.4% year over year to $330 million, while non-GAAP reported EBITDA jumped 13.9% to $376 million.
Balance Sheet & Other Details
NortonLifeLock exited the third quarter with cash and cash equivalents of $1.77 billion compared with the previous quarter’s 1.53 billion. Long-term debt was $2.76 billion, down from $2.78 billion in the previous quarter.
The company generated cash worth $330 million through operating activities in third-quarter fiscal 2022 and $648 million in the first nine months of fiscal 2022. Free cash flow was $328 million in the third quarter and $644 million in the first nine months of fiscal 2022.
NortonLifeLock authorized a quarterly cash dividend of $0.125 per share payable on Mar 16, 2022 to shareholders of record as of Feb 22.
Guidance Update
For the full fiscal 2022, NortonLifeLock anticipates revenues in the band $2,795-$2,805 million. It now expects approximately 10% revenue growth compared with the prior range of 9-10% and the original estimate of 8-10%.
The company raised the lower-end of non-GAAP earnings per share estimate to $1.73-$1.75 compared with the prior estimate of $1.70-$1.75 and the original estimate of $1.65-$1.75.
Zacks Rank & Key Picks
NortonLifeLock currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader computer and technology sector include the iPhone maker Apple (AAPL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Analog Devices (ADI - Free Report) and Axcelis Technologies (ACLS - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by 3.6% to $1.43 per share over the past seven days. For fiscal 2022, earnings estimates have moved north by 5.9% to $6.15 per share in the past seven days.
Apple’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 20.3%. AAPL stock has appreciated 25.9% in the past year.
The Zacks Consensus Estimate for Analog Devices’ first-quarter fiscal 2022 earnings has been revised upward by a penny to $1.79 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 7 cents to $7.53 per share in the past 30 days.
Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.1%. Shares of ADI have gained 7.6% in the past year.
The Zacks Consensus Estimate for Axcelis Technologies fourth-quarter 2021 earnings has been revised upward by 16 cents to 84 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 8.5% to $2.67 per share in the last 90 days.
Axcelis’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 24.1%. Shares of ACLS have rallied 63.8% in the past year.