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Symantec Refocused
2Copyright © 2016 Symantec Corporation
USE OF GAAP AND NON-GAAP FINANCIAL INFORMATION
Our results of operations have undergone significant change due to the impact of litigation accruals, stock-based compensation, restructuring, transition and separation matters, charges related to the amortization of intangible assets, and certain other income and expense items that management considers unrelated to the Company’s core operations. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Our management team uses these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations page of our website at: www.symantec.com/invest.
3Copyright © 2016 Symantec Corporation
FORWARD LOOKING STATEMENTS
This presentation contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements regarding the use of proceeds from the sale of Veritas, including statements regarding the capital allocation program, including the ASR and special dividend; statements regarding the strategic investment of Silver Lake Partners; statements regarding the growth prospects of our security business; and statements with respect to our continuation of our current dividend. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; fluctuations and volatility in Symantec’s stock price; the ability of Symantec to successfully execute strategic plans, including acquisitions or strategic transactions; maintaining customer and partner relationships; fluctuations in tax rates and currency exchange rates; the timing and market acceptance of new product releases and upgrades; and the successful development of new products, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors section of our Form 10-K for the year ended April 3, 2015.
Any information regarding pre-release of Symantec offerings, future updates or other planned modifications is subject to ongoing evaluation by Symantec and therefore subject to change. This information is provided without warranty of any kind, express or implied. Customers who purchase Symantec offerings should make their purchase decision based upon features that are currently available.
We assume no obligation to update any forward looking information contained in this presentation.‐
4Copyright © 2016 Symantec Corporation
Operating one of the world’s largest cyber intelligence networks, we see more threats, and protect more customers from the next generation of attacks.We help companies, governments and individuals secure their most important data wherever it lives.
THE GLOBAL LEADER IN CYBERSECURITY
5Copyright © 2016 Symantec Corporation
THREAT LANDSCAPE MORE CHALLENGING THAN EVER
Enterprises Are Not Ready For Tomorrow’s
Threats
Advanced attacks are lost in a mass of less important alerts
Average attack goes undetected for 170 days
Just 31% of breaches are found by the victim organization – the rest are found by a third party, law enforcement, etc.
Data Is The New Perimeter
With 65% of workloads in the cloud (Amazon Web Services, Salesforce, Box, Office 365), more of your data is at risk
Data is increasingly accessed from outside the firewall
Consumers Need Reassurance They Are
Safe Online
Online customers don’t know if they can trust e-commerce websites
Don’t have visibility into attacks on brand
Never Have Enough Time or Resources
Organizations don’t know how they are doing or where to focus – 96% of alerts never reviewed
Hard to hire the right security talent
6Copyright © 2016 Symantec Corporation
Q3 HIGHLIGHTS
New on-line acquisition grew 8% y/y
Ahead of plan
56% operating margin
Norton Shopping Guarantee offering increases customer confidence
+3% revenue growth
Launched ATP: Endpoint, Email, and Network
1% revenue growth for the 3rd consecutive quarter
Enterprise SecurityConsumer Security
7Copyright © 2016 Symantec Corporation
SYMANTEC AT A GLANCEFY15
Non-GAAP Revenue
FY16 Q3
Revenue
FY16 Q3 Non-GAAP Operating
Margin
Consumer Security $1,917 414 56%
% Y/Y (CC) (5%) (6%)Enterprise Security $2,069 495 5%
% Y/Y (CC) (1%) 1%Total Revenue $3,986 909 28%% Y/Y (CC) (3%) (2%)
Enterprise Security (FY16 YTD)
Threat Protection Information ProtectionWebsite Security Cyber Security Services
8Copyright © 2016 Symantec Corporation
Q3 FY16 FINANCIAL SUMMARYRevenue was above midpoint of guidance rangeOperating margin and EPS exceeded guidance Excluding TSAs, operating margin would have been 200 basis points higher
Q3 FY16 operating margin and EPS exceeded guidance
Non-GAAP in $M Guidance Actuals Yr/Yr (FX Neutral)
Total Revenue $890 - $920 $909 (2%)
Operating Margin 25.5% - 27.5% 27.9% N/A
EPS (¢/share) 22¢ - 25¢ 26¢ N/A
9Copyright © 2016 Symantec Corporation
FOCUSED ON FOUR PRIORITIES
Improving our Cost Structure
3
Realizing our Unified Security Strategy
1
Efficiently Allocate Capital
4
Building our Enterprise Security Sales Pipeline/GTM
2
10Copyright © 2016 Symantec Corporation
REALIZING OUR UNIFIED SECURITY STRATEGY
Users
Data
Apps
Cloud
Devices
Network
Data Center
CYBER SECURITY SERVICESMonitoring Incident Response Simulation Adversary Threat Intelligence
THREAT PROTECTIONEndpoints Data Center Gateway
INFORMATION PROTECTIONData Access
Threat Prevention, Detection, Forensics & Resolution Device, Email, Server, Virtual & Cloud Workloads Available On-premise and in the Cloud
Identity and Data Loss Protection Cloud-based Key Management Cloud Security Broker
UNIFIED SECURITY ANALYTICS PLATFORMTelemetry Threat Analytics Global Intelligence Protection Engines Incident Management
Big data security analytics; available to customers in self-service mode
11Copyright © 2016 Symantec Corporation
NORTON GROWTH DRIVERS
Benefit from modest PC
security market growth
Increasing threat activity
drives new users
TelCo / Mobile – growing success in an increasingly
multi-device world
Well-positioned for growth in the
Consumer IoT market
12Copyright © 2016 Symantec Corporation
NORTON WELL-POSITIONED IN THE CONSUMER SECURITY MARKET
Unrivaled Protection• 63M devices, 4M SMBs, 6.8M mobile devices protected• 2.4T attacks blocked, 540M searches protected each year
Leveraging Intelligence of Combined Enterprise & Consumer Network• 175M endpoints, 57M attack sensors, 157 countries
Premium Brand• 99% aided awareness in US• Best-in-class unaided awareness in all top markets
Technology Leadership• Most awards for performance and innovation• 34x PCMag Editors’ Choice winner
Revenue Market Share CY14
$5.1B
Total Market Size
CY15 CY18
CAGR
+2.4%
9%TrendMicro
4% ESET5%
AVG
15%McAfee
42%Norton
10%Kaspersky
15%Others
WW Consumer Security Norton Competitive Advantage
$5.4B
Source: IDC and Company data
13Copyright © 2016 Symantec Corporation
CONSUMER MOBILE SECURITY TAM SMALL BUT GROWING
Robust Protection Through Norton Mobile Insight• 15M Android Apps in database,
in 200 App Stores• 3M Malicious Apps identified,
another 9M with intrusive behavior
Norton Mobile Strategies
• Part of Norton multi device value prop
• Introduce customers to Norton Service
• Stand alone revenue from Premium
• Provides telemetry and insights to Enterprise
Paid Share
$217M
Total Market Size
CY15 CY16
+15%
85%Paid for
15%Free
WW Consumer Mobile Security Mobile Growth Opportunities
$249M
Source: IDC and Company data
14Copyright © 2016 Symantec Corporation
ENTERPRISE SECURITY | GROWTH DRIVERS
Addressable Market Size Key Growth Areas
11.7 13.8
3.2 4.3 3.96.5
6.9
1.5
3.6
CY15 CY18Threat Protection
CY15 CY18Information Protection
CY15CY18
Cyber Security Services
Expanded
Current
+35%TAM
+50%TAM
+50%TAM
($ in billions) Threat Protection
• Renaissance underway in Endpoint Security to upgrade devices with next generation functionality
Information Protection
• Move to cloud requires increase need for data loss protection and user authentication
Cyber Security Services
• Lack of qualified security professionals and complexity of ever changing threat environment requires outsourcing security monitoring and response
Analytics Offerings
• Leverage big data analytics for detecting and remediating targeted attacks and zero day vulnerabilities
Enterprise Security (FY16 YTD)
Threat Protection Information Protection
Website Security Cyber Security Services
Source: IDC, Gartner, and Company data
15Copyright © 2016 Symantec Corporation
SYMANTEC NEXT GEN ENDPOINT PROTECTION (SEP)The most robust platform of next generation engines that combine to deliver proactive protection from advanced attacks
Vantage Intrusion
Prevention
SAPEMachine Learning
InsightSONAR
Behavioral Detection
Exploit Protection SymClass MutantX
NETWORK FILE ATTRIBUTES RELATIONSHIP BEHAVIORS HARDENING AUTOMATION CLUSTERING
Blocks attacks by scanning network application layer traffic in real time
Static Attribute Protection Engine (SAPE) blocks malware using advanced signature-less technology
Uses the wisdom of the crowd and artificial intelligence to block 99% of advanced attacks
Advanced machine learning watches programs and immediately blocks abnormal behaviors
Blocks all zero day exploits
Safely processes over 1M indicators of compromise (IOCs)/ day
Identifies key attributes, clusters malware into families
* AV TEST- Annual Best Protection Award, February 2016 “Symantec scored 100% for protection against zero-day attacks” AV-Comparatives/MRG Effitas Test February 2016 “Symantec Endpoint Protection blocked 100% of in-the-wild malware attacks with no false positives”
Dennis Technology Labs, December 2015 “The most accurate appliance was Symantec ATP” Miercom, Dec 2015 “Symantec ATP scored 100% against advanced evasive techniques”
16Copyright © 2016 Symantec Corporation
SYMANTEC ADVANCED THREAT PROTECTIONLarge and sticky Endpoint and Email install base offers ATP upsell opportunity
ATP is an upsell opportunity into endpoint and email security install base
• 370k customers representing 110 million endpoint security devices
• 45K email customers representing 15.4M end users
• Current ASP for endpoint security is mid single digits
• Upsell opportunity is $15-$25 per endpoint
• Competitors charging upwards of $40 per endpoint per module
• $2b ATP up-sell opportunity over 3-5 years
ADVANCED THREAT PROTECTION
Global Intelligence Exported Data
Detect
Prioritize
Advanced Threat Protection
Investigate Remediate
Endpoint Security
Network Security
Email Security
3rd party
17Copyright © 2016 Symantec Corporation
Data Loss Prevention
Encryption
Identity Access Manager
Validation and ID Protection (VIP)
INFORMATION PROTECTIONOur Information Protection portfolio keeps data protected while keeping employees productive
Track and secure confidential dataDiscover, monitor, and protect confidential information wherever it’s stored and however it’s used—on mobile devices, within data centers, or in the cloud
Encrypt your data in case it falls into the wrong handsFull-disk and removable media encryption for endpoints, email encryption secures sensitive communications, and file share encryption protects files on shared network drives and in the cloud
Give access only to users who need itSingle Sign-on (SSO) with strong authentication, access control, and user management, to control who accesses internal and 3rd-party cloud-based applications
Strong authentication made easyTwo-factor and risk-based tokenless authentication prevents unauthorized access to sensitive networks and applications
18Copyright © 2016 Symantec Corporation
CYBERSECURITY SERVICESRely on our 1,000+ Cyber Warriors, around the clock, around the world
Actionable insightsReceive proactive notifications of evolving attack vectors and techniquesDeepSight Intelligence keeps customers informed of vulnerabilities and threats to their organization
Extend customers security program with our experts24/7 monitoring of customers’ entire security infrastructureMonitors every major security product on the market
Respond with speed and precisionReadiness Services help assess, test, and refine response programIncident Response Services provides remote and on-site investigation to help contain attacks, understand their full scope, and ensure that all components have been eradicated
Prepare for what’s nextStrengthen employee cyber-readiness through security education and simulation exercisesIdentify key risks employees are facing and build a comprehensive program to assess and improve security awareness
Incident Response
Managed Security Services
Simulation Services
Threat Intelligence Services
Leader in Gartner Magic Quadrant for Managed Security Services
19Copyright © 2016 Symantec Corporation
Protect online business—alwaysEnsure that traffic to and from websites cannot be compromised by attackers
Secure websites, data, and applications 24/7Assure up-to-the-minute visibility into any potential security weaknesses in your website
Deliver trust with every downloadProtect the integrity of software, ensure that customers only run untampered versions of software
Increase sales with the Norton Shopping GuaranteeDrive more online sales with increased customer confidence
WEBSITE SECURITYProtect online business - always
SSL/TLS Certificates
Website Security
Code Signing
Norton Shopping Guarantee
20Copyright © 2016 Symantec Corporation
CAPITAL ALLOCATIONOn February 4th, announced board increased capital return program to $5.5 billion – plans to return all the after-tax cash proceeds from the Veritas transaction to shareholders– $500 million ASR completed in January 2016– Paid a $4/share special dividend equaling $2.7 billion on March 22nd – $2.3 billion in share repurchases by March 2017
• Of which, $1 billion ASR launched on March 22nd
Quarterly dividend of 7.5¢/share with a commitment to increasing this dividend as free cash flow grows over timeAnnounced that Silver Lake Partners has made a $500 million strategic investment in Symantec through a convertible senior note
21Copyright © 2016 Symantec Corporation
CONTACT INVESTOR RELATIONSJonathan Doros(650) [email protected]
Nate Pollack(650) [email protected]