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NortonLifeLock reported fourth-quarter fiscal 2020 non-GAAP earnings of 26 cents per share that increased 63% year over year. The figure beat the Zacks Consensus Estimate by 36.8%. This was driven by strong execution and lower stranded costs.
Revenues declined 0.5% year over year to $614 million but beat the consensus mark of $602 million.
NortonLifeLock Inc. Price, Consensus and EPS Surprise
Direct customer revenues (90% of revenues) inched up 1.5% year over year to $549 million. Partner revenues (10% of revenues) fell 4.7% on a year-over-year basis to $61 million.
Revenues from ID Analytics (2.4% of revenues) dropped 67% from the year-ago quarter to $4 million. On Jan 31, 2020, NortonLifeLock completed the sale of the ID Analytics solutions business.
Direct average revenue per user (ARPU) increased 2.7% year over year to $9.07.
Continued stabilization of direct customer count was a positive.
In fourth-quarter fiscal 2020, gross profit increased 4.9% year over year to $517 million. Gross margin expanded 490 basis points (bps) on a year-over-year basis to 84.8%.
Operating income on a non-GAAP basis rose 51.8% year over year to $255 million. Operating margin was 41.5%, up significantly from 27.2% in the year-ago quarter.
Balance Sheet
As of Apr 3, 2020, NortonLifeLock had $2.3 billion in cash and cash equivalents compared with $12.65 billion in the prior quarter. Long-term debt was $3.47 billion, down from $3.72 billion in the previous quarter.
Notably, cash outflow from operations was $1.8 billion, down significantly from an inflow of $399 million in the third quarter of fiscal 2020, reflecting large one-time payments for divestiture-related tax amounts.
NortonLifeLock returned $9 billion to investors during the quarter, including $658 million worth of repurchases. Management notes that “with $2.3 billion of cash and no debt maturities until the end of fiscal year 2022, the company is well positioned to invest in expanding its portfolio to serve the cyber safety needs of everyone.”
Guidance
For the first quarter of fiscal 2021, NortonLifeLock expects revenues between $590 million and $605 million, adjusting for an extra week ($44 million) and ID Analytics revenues ($14 million) reported in first-quarter fiscal 2020.
Management continues to expect low-single-digit bookings growth.
Moreover, non-GAAP earnings from continuing operations are expected between 18 cents and 22 cents per share.
Anaplan, NVIDIA and Nutanix are set to report quarterly results on May 26, 21 and 27, respectively.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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NortonLifeLock (NOLK) Q4 Earnings & Revenues Beat Estimates
NortonLifeLock reported fourth-quarter fiscal 2020 non-GAAP earnings of 26 cents per share that increased 63% year over year. The figure beat the Zacks Consensus Estimate by 36.8%. This was driven by strong execution and lower stranded costs.
Revenues declined 0.5% year over year to $614 million but beat the consensus mark of $602 million.
NortonLifeLock Inc. Price, Consensus and EPS Surprise
NortonLifeLock Inc. price-consensus-eps-surprise-chart | NortonLifeLock Inc. Quote
Quarter Details
Direct customer revenues (90% of revenues) inched up 1.5% year over year to $549 million. Partner revenues (10% of revenues) fell 4.7% on a year-over-year basis to $61 million.
Revenues from ID Analytics (2.4% of revenues) dropped 67% from the year-ago quarter to $4 million. On Jan 31, 2020, NortonLifeLock completed the sale of the ID Analytics solutions business.
Direct average revenue per user (ARPU) increased 2.7% year over year to $9.07.
Continued stabilization of direct customer count was a positive.
In fourth-quarter fiscal 2020, gross profit increased 4.9% year over year to $517 million. Gross margin expanded 490 basis points (bps) on a year-over-year basis to 84.8%.
Operating income on a non-GAAP basis rose 51.8% year over year to $255 million. Operating margin was 41.5%, up significantly from 27.2% in the year-ago quarter.
Balance Sheet
As of Apr 3, 2020, NortonLifeLock had $2.3 billion in cash and cash equivalents compared with $12.65 billion in the prior quarter. Long-term debt was $3.47 billion, down from $3.72 billion in the previous quarter.
Notably, cash outflow from operations was $1.8 billion, down significantly from an inflow of $399 million in the third quarter of fiscal 2020, reflecting large one-time payments for divestiture-related tax amounts.
NortonLifeLock returned $9 billion to investors during the quarter, including $658 million worth of repurchases. Management notes that “with $2.3 billion of cash and no debt maturities until the end of fiscal year 2022, the company is well positioned to invest in expanding its portfolio to serve the cyber safety needs of everyone.”
Guidance
For the first quarter of fiscal 2021, NortonLifeLock expects revenues between $590 million and $605 million, adjusting for an extra week ($44 million) and ID Analytics revenues ($14 million) reported in first-quarter fiscal 2020.
Management continues to expect low-single-digit bookings growth.
Moreover, non-GAAP earnings from continuing operations are expected between 18 cents and 22 cents per share.
Zacks Rank & Stocks to Consider
Anaplan, Inc. , NVIDIA (NVDA - Free Report) and Nutanix (NTNX - Free Report) are some better-ranked stocks in the broader computer and technology sector. While AudioEye sports a Zacks Rank #1 (Strong Buy), NVIDIA and Nutanix carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anaplan, NVIDIA and Nutanix are set to report quarterly results on May 26, 21 and 27, respectively.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>