Symantec Q4 2010 Earnings Call Transcript

Symantec Q4 2010 Earnings Call Transcript
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Symantec (SYMC)

Q4 2010 Earnings Call

May 05, 2010 5:00 pm ET

Executives

Enrique Salem - Chief Executive Officer, President and Director

James Beer - Chief Financial Officer and Executive Vice President

Helyn Corcos - Vice President of Investors Relations

Analysts

Philip Winslow - Crédit Suisse First Boston, Inc.

Walter Pritchard - Citigroup Inc

Brad Zelnick - Macquarie Research

Neil Herman - Soleil Securities Group, Inc.

Brent Thill - UBS Investment Bank

Perry Huang

Todd Raker - Deutsche Bank AG

John DiFucci - JP Morgan Chase & Co

Rob D. Owens

Kash Rangan - BofA Merrill Lynch

Adam Holt - Morgan Stanley

Sarah Friar - Goldman Sachs Group Inc.

Presentation

Operator

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Good day, and Welcome to the Symantec's Fourth Quarter 2010 Earnings Conference Call. At this time, I would like to turn the call over to Ms. Helyn Corcos, Vice President of Investor Relations. Please go ahead.

Helyn Corcos

Good afternoon, and thank you for joining our call to discuss fiscal fourth quarter and fiscal year 2010 financial results. With me today are Enrique Salem, Symantec's President and CEO; and James Beer, Symantec's Executive Vice President and CFO.

In a moment, I will turn the call over to Enrique. He will discuss how Symantec executed during the quarter, then James will provide highlights of our financial results as well as discuss our guidance assumptions as outlined in the press release. This will be followed by a question-and-answer session.

Today's call is being recorded and will be available for replay on Symantec's Investor Relations website. A copy of today's press release and supplemental financial information are posted on our website. And a copy of today's prepared remarks will be available on our Investor Relations website shortly after the call is completed.

Before we begin, I'd like to remind you that we will review our non-GAAP financial results focusing on year-over-year constant currency growth rates unless otherwise stated. Sequential growth rates are based on our recorded results. For the March quarter 2010, the actual weighted average exchange rate was $1.38 per euro and the end-of-period rate was $1.35 per euro compared to our guided rate of $1.40 per euro.

For the March 2009 quarter, the actual weighted average was $1.30 per euro and the end-of-period rate was $1.34 per euro. We've included a summary and reconciliation of the year-over-year growth rate in our press release tables and in our supplemental information.

As we stated on last week's call, we will regularly provide a currency update following the end of each quarter. This will be posted on our website's Quarterly Results section. Given the rapidly fluctuating exchange rate environment, we encourage everyone to apply the rule of thumb as a guide to estimating the impact of currency fluctuations on our financial metrics once the quarter has ended.

Moving on. Some of the information discussed on this call, including our projections regarding revenue, operating results, deferred revenue, cash flow from operations, amortization of acquisition-related intangibles and stock-based compensation for the coming quarter, contain forward-looking statements.

These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statement. Additional information concerning these risks and uncertainties can be found in the company's most recent periodic report filed with the U.S. Securities and Exchange Commission. Symantec assumes no obligation to update any forward-looking statements.

In addition to reporting financial results in accordance with generally accepted accounting principles or GAAP, Symantec reports non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP results, which can be found in the press release and on our website. And now, I would like to introduce our CEO, Mr. Enrique Salem.

Enrique Salem

Thank you, Helyn, and good afternoon, everyone. I'm pleased to report another quarter of solid results. It's a great way to end the fiscal year. We started this fiscal year with a clear set of priorities. And as I looked back over the year, I'm proud of what we've accomplished. I'm pleased with the progress we've made in revitalizing our Security business, moving customers to the next generation data protection, driving the commoditization of IT infrastructure and expanding our Cloud-based offerings.

We also made significant progress using technology across our business to develop unique, integrated solutions that make cross-selling our products much easier for our sales team.

Now I'll spend some time discussing the highlights from this last quarter. Our Consumer business generated another quarter of robust growth, reflecting strong go-to-market partnerships. Our results-oriented relationships enabled us to acquire consumers and grow our business aggressively. We focused on replacing the competition and structuring positive financial deals for both Symantec and the partner.

We entered into a significant new partnership with Samsung, shipping Norton Internet Security on their netbooks, and Norton Online Backup on their netbooks and notebooks worldwide. In addition, Fujitsu signed the exclusive agreement to ship Norton products globally on their consumer and commercial PCs. We now have partnerships with nine of the top 10 OEMs with our security products. We continue to expand our partnerships with our online backup offerings and have partnerships with six of the top 10 OEMs, five of which we signed during the last year.

Our new eCommerce solution is also helping us to acquire and retain more customers. We're very thorough in the development of our eCommerce platform and we now have access to much richer information about our customers. We're also benefiting from the ability to quickly make improvements to address the unique needs of each customer segment and we have already seen an increase in OEM trialware conversions. We expect to complete the transition to our in-house eCommerce platform by the end of the June quarter.

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