Symantec Sees 'Resurgence' In Endpoint Technology Demand In Fiscal 2015

As the number of security threats accelerates, Symantec CEO Michael Brown said, the company is seeing a "resurgence" in demand for endpoint security technology.

An increased awareness of attacks on endpoints drove Symantec's endpoint security business, Brown said on the company's Q4 and fiscal 2015 year-end earnings call, returning the segment to market growth and outpacing the market overall with year-over-year growth of 6 percent.

"There's a resurgence of interest in the endpoint, because that's where a lot of attacks get through," Brown said. "That's where a lot of the unencrypted data is as well. We're seeing increased awareness that that's a very important part of the whole enterprise security infrastructure that needs to be protected."

[Related: Top 5 Moneymaking Security Certifications For 2015]

Brown said there were additional opportunities for endpoint security expansion around refreshes of the endpoint management line, particularly around mobile and cloud capabilities.

"We're not just leaving endpoint management to decline. We're going to be investing in that area because we see some opportunity," Brown said. In general, he said, there will be a broader cross section of products in 2016 focused on endpoint security.

In addition to growth in endpoint security, Brown said, Symantec continued to see growth in data loss protection and incident response, as well as further investment in "growth areas" such as threat protection, information protection and cybersecurity services.

Symantec as a whole posted sales of $1.5 billion in its fourth quarter, down 7 percent year over year. Net income for the quarter, which ended April 3, was $176 million, down 19 percent from the same quarter last year. For the full year, Symantec sales were $6.5 billion, down 3 percent year over year. Net income for fiscal 2015 was $878 million, down 2 percent from fiscal 2014.

"I'm pleased with all the progress the team has made in 2015 and I'm excited about our growth prospects," CFO Thomas Seifert said on the earnings call.

Symantec executives also addressed the upcoming company split, which is expected to be operationally in effect by October and legally completed by January of next year. In a financial analysts' day last month, Symantec CFO Thomas Seifert said the split was on track, but costs were proving to be higher than originally anticipated. Previous costs were estimated at $220 million, but Seifert said total cost estimates have risen to between $335 million and $385 million. The company also raised estimates for total layoffs from 2,000 to more than 2,500. Those layoffs are already well underway, Brown said on the earnings call Thursday, with between half and two-thirds of the cuts having been completed.

Brown said on the earnings call that he expects the split will benefit the company's channel partners, as there is very little partner overlap between the company's security and Veritas businesses, and a split will help drive focus and more investment for partners. He said the company's new channel program, which it rolled out a year ago, has been well-received by partners, driving better economics, certifications and product lines.

"I would say overall, we feel very good about where our channel program is and the enthusiasm we're seeing from the channel," Brown said.

For the coming year, Symantec predicted that revenue would be between $6.2 billion and $6.3 billion, marking an expected year-over-year growth rate of up to 2.3 percent in constant currency. For the first quarter of fiscal 2016, Symantec predicts revenues to be between $1.5 billion and $1.54 billion, which amounts to a year-over-year drop of 0.5 percent to a year-over-year growth of 2.1 percent.

PUBLISHED MAY 14, 2015