NortonLifeLock CEO Vincent Pilette: We Must Grow Revenue, Cut Costs

The former consumer unit of Symantec needs to eliminate $1.3 billion in costs, Pilette said, and the company has reduced its headcount by 8 percent over the past quarter and put four or five corporate campuses up for sale.

NortonLifeLock needs to both accelerate top-line growth and shrink operating costs following the sale of its enterprise business to Broadcom, said new CEO Vincent Pilette.

Pilette said the Tempe, Ariz.-based former consumer division of Symantec needs to eliminate $1.3 billion in costs, which the company has embarked upon by reducing its headcount by 8 percent in the past quarter and putting four or five corporate campuses up for sale. Symantec’s consumer cyber safety business was renamed NortonLifeLock Monday, and Pilette was promoted from CFO to CEO Thursday.

“The focus on execution and optimization of our cost structure will enable us to fund many growth initiatives,” Pilette told investors Thursday. Pilette took over for Richard Hill, who had served as Symantec’s interim CEO since May and spearheaded the $10.7 billion sale of the company’s enterprise security business to Broadcom.

[Related: Ex-Symantec Consumer Business Taps Vincent Pilette As New CEO]

Pilette said he hopes to use proceeds from the cost cuts to drive enrollment for the company’s Norton 360 security suite membership, expand outside the United States, convert partner subscribers into direct subscribers, and develop new products and functionalities.

Specifically, Pilette said the savings are being poured into marketing investments targeted at acquiring new customers. NortonLifeLock’s direct customer count held steady at 20.1 million on a quarter-over-quarter basis, which Pilette said marks the first quarter in several years the company hasn’t lost direct customers in excluding a temporary customer bump following publicity around the Equifax breach.

NortonLifeLock’s marketing message has been largely focused around privacy or identity protection since that’s the primary reason that customers are subscribing, Pilette said. But customers opting for an all-inclusive membership also benefit from the security protection the company is able to provide, according to Pilette.

Revenue for all of Symantec in the quarter ended Oct. 4 inched ahead to $1.19 billion, up 0.3 percent from $1.18 billion the year prior. That edged out Seeking Alpha’s revenue estimate of $1.18 billion.

Non-GAAP net income for all of Symantec climbed to $296 billion, or $0.46 per share, up 6.9 percent from $277 billion, or $0.42 per share, last year. That beat Seeking Alpha earnings estimates of $0.41 per share.

On a divisional basis, the Symantec enterprise security business sold to Broadcom saw revenue for the quarter climb to $579 million, up 1.2 percent from $572 million a year earlier. And non-GAAP net income for the enterprise security business jumped to $183 million, or $0.28 per share, up 4 percent from $176 million, or $0.27 per share, the year prior.

Meanwhile, the company’s consumer cyber safety business - now renamed NortonLifeLock – saw revenue dip to $608 million, down 0.7 percent from $612 million the year prior. And non-GAAP net income for the consumer cyber safety business jumped to $113 million, or $0.18 per share, up 11.9 percent from $101 million, or $0.15 per share, last year.

NortonLifeLock’s stock climbed $0.35 (1.44 percent) to $24.69 in after-hours trading Thursday. That’s the highest the company’s stock has traded since Sept. 11.

In the coming quarter, NortonLifeLock expects to achieve non-GAAP earnings of $0.05 to $0.10 per share on revenue in the range of $602 million to $612 million.