Investor Presentation August 2014 Forward Looking Statements This - - PDF document

Investor Presentation August 2014 1

Investor Presentation

August 2014 Forward Looking Statements

This presentation contains statements regarding our financial and business results and business strategy, which may be considered forward‐ looking within the meaning of the U.S. federal securities laws, including projections of future revenue, operating margin and earnings per share, projections of amortization of acquisition‐related intangibles and stock‐based compensation and restructuring charges, operating margin expansion and future return of capital to shareholders. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, 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; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; our ability to reduce our operating expenses; fluctuations in currency exchange rates; our actual effective tax rate in future periods; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, 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 sections of our Form 10‐K for the year ended March 28, 2014. 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.

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Investor Presentation August 2014 2

Use of GAAP and Non‐GAAP Financial Information

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Our results of operations have undergone significant change due to a series of acquisitions, the impact of stock‐based compensation, impairment charges and other corporate events, including the impact on revenue of the ongoing investigation into Symantec’s compliance with certain provisions of its 2007 GSA contract. 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. Our non‐GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be

read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non‐GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non‐GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non‐GAAP financial measures to the comparable GAAP results, which can be found, along with other financial information, on the investor relations’ page of our website at www.symantec.com/invest.

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At Symantec, we protect your information wherever it’s stored or accessed.

Investor Presentation August 2014 3

• 20,000 Employees in 50 Countries
• 4th Largest Software Company in The WORLD

Protecting the world’s information requires great people.

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We do security and a whole lot more.

• We have the best visibility into what attackers are doing because we operate the

largest civilian cyberintelligence threat network in the world.

• We are pioneering new solutions in growing markets like mobile, cloud, appliances,

backup, data loss prevention, managed security services and authentication.

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Investment Thesis

• Operates in growing markets – backup appliances, mobile, cloud, advanced threat

protection, data loss prevention, and managed security services – where IT spend continues to grow

• Leverages the world’s largest civilian cyberintelligence threat network to provide faster

and better protection

– Broadest set of market‐leading brands across security and backup in the industry – Global base of customers from consumers to large enterprises and governments

• Opportunity to grow and increase profitability to create shareholder value
• Strong cash flow generation and balance sheet to allocate towards growth initiatives
• Continue to return significant cash to shareholders with at least 50% of free cash flow

returned through dividends and buybacks.

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Progress Achieved in 1Q15

8 ‐16% ‐9% ‐3% 3% ‐20% ‐16% ‐12% ‐8% ‐4% 0% 4% $1.0 $1.2 $1.4 $1.6 $1.8

2Q14 3Q14 4Q14 1Q15 Implied Y/Y Billings Growth Revenue ($ in billions) Revenue Implied Y/Y Billings Growth

1Q15 1Q14 Revenue $1,735 $1,709 Deferred Revenue $3,713 $3,875 Non‐GAAP Operating Margin1 24.6% 25.2% Non‐GAAP EPS1 45¢ 44¢

• Solid first quarter with revenue, operating margin

and EPS exceeding our guidance

• Strong business activity in North America
• Federal and renewals teams both delivered one
• f their best quarters ever
• Backup appliances, trust services and data loss

prevention businesses generated robust revenue growth

• Implied billings growth of 3% year‐over year

achieved full quarter ahead of our internal plan and third consecutive quarter of improving y/y billings trend

1 Non‐GAAP financial measure. See www.symantec.com/invest for a reconciliation to the applicable GAAP financial measure

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Our Five Priorities

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• Several opportunities to improve our growth profile, maximize profitability, and create value

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Optimize Some of Our Businesses for Margin Prioritize Investments for Growth Reduce Costs and Improve Efficiencies through Eight Initiatives Attract Leading Talent to Our Executive Team Return Significant Cash to Shareholders

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Optimize Some of Our Businesses for Margin

• Some businesses are ideal for improving operating margin while others are best positioned for growth
• Proactively optimizing more mature, lower growth potential businesses to expand operating margin
• Deploy savings and prioritize investments against growth objectives in enterprise areas
• Highly profitable ~$2B business in a mature, low growth

market

• Formed a business unit under Fran Rosch
• Enhancing franchise value while improving margin and

cash generation through more focused leadership

• Optimizing eCommerce direct to consumer channel
• Simplifying our offering to Norton Security and Norton

Security with Backup

• Released Norton Small Business, our first small business
• ffering
• ~$650M business
• High margin business
• Includes Storage Foundation and Cluster Server

Information Availability

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Prioritize Investments for Growth

• Accelerate growth through prioritizing investments in backup appliances and selected security businesses

such as mobile, advanced threat protection, managed security services, and data loss prevention

• Shifted resource funding in R&D budget to put more dollars behind the most promising market opportunities

Information Management Information Security

• Leader with 30% market share in backup, according to IDC
• Backup growth has outpaced market over past few years

– NetBackup appliance was one of our fastest growing businesses in June quarter, up 35% Y/Y – Bringing differentiated appliances to market

• Investing in Disaster Recovery‐as‐a‐Service which we

anticipate will be a multi‐billion dollar market

• ATP:

– Launched managed ATP service which triangulates threat indicators from our endpoint protection and 3rd party network security products – Introduced managed incident response service, which provides emergency on‐demand services to help customers recover from a breach – Only company that will offer a cloud‐based, hands‐on cyber security simulation – Integrated ATP products for endpoint, threat defense gateway, and email

• DLP:

– Integrating DLP functionality into security products which will provide customers with complete visibility, consistent policy enforcement and unified governance of their information

Product Delivery for FY15

Information Management Information Security 2H14 FY15

Released NetBackup, the only backup product designed for enterprise level scale, which can accommodate hundreds of thousands of virtual machines & petabytes of data while giving customers 400x faster recovery Released Storage Foundation, which includes disruptive new capability that abstracts in‐server memory, allowing the sharing of flash storage across servers without the need for expensive storage hardware

Released mobile workforce productivity which integrates application & device management capabilities into a holistic solution for the enterprise

Released appliances, Backup Exec 2014, Enterprise Vault 11.0, and Disaster Recovery Orchestrator (automates and manages disaster recovery of Windows based applications residing on either physical

• r virtual machines to Microsoft Azure cloud)

Releasing NetBackup and IT Resiliency (bridges heterogeneous infrastructure and includes on‐premise and cloud capability)

• Launched MSS ATP service
• DLP & mobile security integration in Mobile App Center
• Extending DLP to multiple tiers, reducing its footprint and making it

more cost effective

• Integrating ATP into threat defense gateway, Symantec Endpoint

Protection, and into the email control point

• Releasing Norton Security and Norton Security with Backup

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Reduce Costs and Improve Efficiencies

• Increase R&D capacity
• Reduction of our global footprint
• Streamline product support
• Optimization of Norton business
• Increase salesforce productivity
• Improve renewal productivity
• License compliance
• Enhance pricing optimization
• We’re focusing on eight initiatives to drive revenue and improve cost efficiencies

Revenue Drivers Efficiency Improvements

Capital Allocation Strategy

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• Our long‐term objective is to return approximately 50% of free cash flow to

shareholders through dividends and share repurchases

– Substantial cash flow generation – About 39% of cash is held onshore

• Strong balance sheet and financial flexibility

– $2.1 billion in investment grade debt

• Investments in technology acquisitions that complement products
• Allocate resources to growth areas such as backup appliances, mobile, cloud,

advanced threat protection, data loss prevention, and managed security services

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At Symantec, we protect your information wherever it’s stored or accessed.

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Contact Investor Relations

Helyn Corcos

Vice President (650) 527‐5523 hcorcos@symantec.com