Symantec Reports Fiscal Fourth Quarter and Full Year 2019 Results

Symantec Corp. (NASDAQ: SYMC) today reported results for its fourth
quarter and full fiscal year 2019 ended March 29, 2019.

“We achieved company revenue in the fourth quarter in line with guidance
and generated strong cash flow from operating activities,” said Richard
S. Hill, Symantec Interim President and CEO. “Our Consumer Cyber Safety
segment continued to deliver solid results, and we were pleased with
increases in average revenue per user, both year-over-year and
sequentially. However, our Enterprise Security revenue was below our
guidance range due to lower than expected bookings, which led to
year-over-year reported billings declining greater than we anticipated.
Despite this weakness, we remain confident in our Integrated Cyber
Defense strategy, which has produced a strong and competitive product
portfolio. Moving forward, in Enterprise Security we are focused on
operational discipline, increasing sales productivity, expanding
operating margins and managing the shift to our ratable cloud delivered
solutions. In Consumer Cyber Safety we will continue to execute on
multiple initiatives to drive revenue growth. With industry-leading
solutions across both our enterprise and consumer businesses, we are
optimistic that we are well positioned to execute against a growing
opportunity in the cyber defense market.”

To help 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 methods we use to produce non-GAAP
results are not in accordance with GAAP and may differ from the methods
used by other companies. Additional information regarding our non-GAAP
measures are provided below.

Fourth Quarter Fiscal 2019 Financial Highlights

• GAAP revenue was $1.189 billion, non-GAAP revenue was $1.195 billion
• GAAP operating margin of 9%, non-GAAP operating margin of 29%
• GAAP diluted EPS was $0.05, non-GAAP diluted EPS was $0.39
• Cash flow from operating activities of $547 million

Fiscal Year 2019 Financial Highlights

• GAAP revenue was $4.731 billion, non-GAAP revenue was $4.762 billion
• GAAP operating margin of 8%, non-GAAP operating margin of 30%
• GAAP diluted EPS was $0.05, non-GAAP diluted EPS was $1.59
• Cash flow from operating activities of $1.495 billion

Leadership Changes

In a separate press release issued today, Symantec announced that
Richard S. Hill has been named Interim President and CEO, effective
immediately. Mr. Hill succeeds Greg Clark, who has stepped down as
President and CEO and as a member of the Symantec Board, also effective
immediately. The Company will commence a search process to find a
permanent CEO.

Vincent Pilette, CFO of Logitech and former VP of Finance for Hewlett
Packard Enterprise’s server, storage and networking business, has been
appointed Executive Vice President and Chief Financial Officer of
Symantec, effective May 21, 2019. Mr. Pilette’s appointment follows a
comprehensive search process initiated in connection with Nicholas
Noviello’s departure as EVP and CFO to pursue other opportunities, as
announced on January 31, 2019.

Symantec’s Board of Directors has declared a quarterly cash dividend of
$0.075 per common share to be paid on June 26, 2019, to all shareholders
of record as of the close of business on June 10, 2019.

For additional details regarding Symantec’s results and outlook, please
see the Supplemental Information on the investor relations page of our
website at: http://www.symantec.com/invest.

Conference Call

Symantec has scheduled a conference call for 5:00 p.m. ET / 2:00 p.m. PT
today to discuss its results for its fourth quarter and full year fiscal
2019 ended March 29, 2019 and to review guidance. Interested parties may
access the conference call through Symantec’s Investor Relations website
at http://investor.symantec.com/investor-relations/events-calendar/.
For telephone access to the conference, call (877) 475-6198 within the
United States or (970) 297-2372 from outside the United States. Please
call 15 minutes early and give the operator conference ID number 4593466.

A replay and our prepared remarks will be available on the investor
relations home page shortly after the call is completed.

About Symantec

Symantec Corporation (NASDAQ: SYMC), the world’s leading cyber security
company, helps organizations, governments and people secure their most
important data wherever it lives. Organizations across the world look to
Symantec for strategic, integrated solutions to defend against
sophisticated attacks across endpoints, cloud and infrastructure.
Likewise, a global community of more than 50 million people and families
rely on Symantec’s Norton and LifeLock product suites to protect their
digital lives at home and across their devices. Symantec operates one of
the world’s largest civilian cyber intelligence networks, allowing it to
see and protect against the most advanced threats. For additional
information, please visit www.symantec.com or
connect with us on Facebook,
Twitter,
and LinkedIn.

NOTE TO EDITORS: If you would like additional information
on Symantec Corporation and its products, please visit the Symantec News
Room at http://www.symantec.com/news.
All prices noted are in U.S. dollars and are valid only in the United
States.

Symantec, the Symantec logo and the Checkmark logo are trademarks or
registered trademarks of Symantec Corporation or its affiliates in the
U.S. and other countries. Other names may be trademarks of their
respective owners.

Forward-Looking Statements: This press release contains
statements which may be considered forward-looking within the meaning of
the U.S. federal securities laws, including the information contained
under the caption “First Quarter and Fiscal Year 2020 Guidance” and the
statements regarding Symantec’s leadership changes and Symantec’s
prospects for growth and value creation, Symantec’s planned cash
dividend, as well as other projected financial and business results,
including demand for its products and services, Symantec’s enhanced
capabilities, and Symantec’s continued cost and operating efficiencies.
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: retention of existing executive leadership team members;
difficulties in improving sales execution and product development during
leadership transitions; general business and economic conditions; our
ability to integrate acquired businesses and realize the expected
benefits of the acquisitions; matters arising out of our completed Audit
Committee investigation and the ongoing U.S. Securities and Exchange
Commission investigation; fluctuations and volatility in Symantec’s
stock price; the ability of Symantec to successfully execute strategic
plans; the ability to maintain customer and partner relationships; the
ability of Symantec to achieve its cost and operating efficiency goals;
the anticipated growth of certain market segments; Symantec’s sales
pipeline and business strategy; fluctuations in tax rates and foreign
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 gain market acceptance. Actual
results may differ materially from those contained in the
forward-looking statements in this press release. Symantec assumes no
obligation, and does not intend, to update these forward-looking
statements as a result of future events or developments. Additional
information concerning these and other risk factors is contained in the
Risk Factors sections of Symantec’s most recent reports on Form 10-K and
Form 10-Q.

USE OF NON-GAAP FINANCIAL INFORMATION: We use non-GAAP measures
of adjusted revenues, operating margin, net income and earnings per
share, which are adjusted from results based on GAAP to include certain
purchase accounting adjustments and exclude certain expenses, gains and
losses. Additionally, we provide the non-GAAP metric of reported
billings (previously referred to as implied billings). These non-GAAP
financial measures are provided to enhance the user’s understanding of
our past financial performance and our prospects for the future. Our
management team uses these non-GAAP financial measures in assessing
Symantec’s performance, as well as in planning and forecasting future
periods. These non-GAAP financial measures are not computed according to
GAAP and the methods we use to compute them 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. Readers 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 including Supplemental Information, on
the investor relations page of our website at: http://www.symantec.com/invest.

SYMANTEC CORPORATION
Appendix A
Explanation
of Non-GAAP Measures

Objective of non-GAAP measures: We believe
our presentation of non-GAAP financial measures, when taken together
with corresponding GAAP financial measures, provides meaningful
supplemental information regarding the Company’s operating performance
for the reasons discussed below. Our management team uses these non-GAAP
financial measures in assessing Symantec’s performance, as well as in
planning and forecasting future periods. Due to the importance of these
measures in managing the business, we use non-GAAP measures in the
evaluation of management’s compensation. These non-GAAP financial
measures are not computed according to GAAP and the methods we use to
compute them may differ from the methods used by other companies.
Non-GAAP financial measures are supplemental and 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.

Contract liabilities adjustment: Our
non-GAAP net revenues eliminate the impact of contract liabilities
purchase accounting adjustments required by GAAP. GAAP requires an
adjustment to the liability for acquired contract liabilities such that
the liability approximates how much we, the acquirer, would have to pay
a third party to assume the liability. We believe that eliminating the
impact of this adjustment improves the comparability of revenues between
periods. Also, although the adjustment amounts will never be recognized
in our GAAP financial statements, we do not expect the acquisitions to
affect the future renewal rates of revenues excluded by the adjustments.
In addition, our management uses non-GAAP net revenues, adjusted for the
impact of purchase accounting adjustments to assess our operating
performance and overall revenue trends. Nevertheless, non-GAAP net
revenues has limitations as an analytical tool and should not be
considered in isolation or as a substitute for GAAP net revenues. We
believe these adjustments are useful to investors as an additional means
to reflect revenue trends of our business. However, other companies in
our industry may not calculate these measures in the same manner which
may limit their usefulness for comparative purposes.

Inventory fair value adjustment: Purchase
accounting requires us to measure acquired inventory at fair value. The
fair value of inventory reflects the acquired company’s cost of
manufacturing plus a portion of the expected profit margin. These
non-GAAP adjustments to our cost of revenues exclude the expected profit
margin component that is recorded under purchase accounting associated
with our acquisitions. We believe the adjustments are useful to
investors as an additional means to reflect cost of revenues and gross
margin trends of our business.

Stock-based compensation: This consists of
expenses for employee restricted stock units, performance-based awards,
bonus share programs, stock options and our employee stock purchase
plan, determined in accordance with GAAP. We evaluate our performance
both with and without these measures because stock-based compensation is
a non-cash expense and can vary significantly over time based on the
timing, size, nature and design of the awards granted, and is influenced
in part by certain factors that are generally beyond our control, such
as the volatility of the market value of our common stock. In addition,
for comparability purposes, we believe it is useful to provide a
non-GAAP financial measure that excludes stock-based compensation to
facilitate the comparison of our results to those of other companies in
our industry.

Amortization of intangible assets:
Amortization of intangible assets consists of amortization of
acquisition-related intangibles assets such as developed technology,
customer relationships and trade names acquired in connection with
business combinations. We record charges relating to the amortization of
these intangibles within both cost of revenues and operating expenses in
our GAAP financial statements. Under purchase accounting, we are
required to allocate a portion of the purchase price to intangible
assets acquired and amortize this amount over the estimated useful lives
of the acquired intangible assets. However, the purchase price allocated
to these assets is not necessarily reflective of the cost we would incur
to internally develop the intangible asset. Further, amortization
charges for our acquired intangible assets are inconsistent in size and
are significantly impacted by the timing and valuation of our
acquisitions. We eliminate these charges from our non-GAAP operating
results to facilitate an evaluation of our current operating performance
and provide better comparability to our past operating performance.

Restructuring, transition and other costs:
Restructuring charges are costs associated with a formal restructuring
plan and are primarily related to employee severance and benefit
arrangements. Other charges include facilities and other exit and
disposal costs, including asset write-offs. Transition costs are
associated with formal discrete strategic information technology
initiatives and primarily consist of consulting charges associated with
our enterprise resource planning and supporting systems and costs to
automate business processes. In addition, transition costs include
expenses associated with our divestitures. We exclude restructuring,
transition and other costs from our non-GAAP results as we believe that
these costs are incremental to core activities that arise in the
ordinary course of our business and do not reflect our current operating
performance, and that excluding these charges facilitates a more
meaningful evaluation of our current operating performance and
comparisons to our past operating performance.

Acquisition-related costs: These represent
the transaction and business integration costs related to significant
acquisitions that are charged to operating expense in our GAAP financial
statements. These costs include incremental expenses incurred to affect
these business combinations such as advisory, legal, accounting,
valuation, and other professional or consulting fees. We exclude these
costs from our non-GAAP results as they have no direct correlation to
the operation of our business, and because we believe that the non-GAAP
financial measures excluding these costs provide meaningful supplemental
information regarding the spending trends of our business. In addition,
these costs vary, depending on the size and complexity of the
acquisitions, and are not indicative of costs of future acquisitions.

Litigation settlement: We may periodically
incur charges or benefits related to litigation settlements. We exclude
these charges and benefits when associated with a significant settlement
because we do not believe they are reflective of ongoing business and
operating results.

Non-cash interest expense and amortization of debt
issuance costs: In accordance with GAAP, we separately account
for the value of the conversion feature on our convertible notes as a
debt discount that reflects our assumed non-convertible debt borrowing
rates. We amortize the discount and debt issuance costs over the term of
the related debt. We exclude the difference between the imputed interest
expense, which includes the amortization of the conversion feature and
of the issuance costs, and the coupon interest payments because we
believe that excluding these costs provides meaningful supplemental
information regarding the cash cost of our convertible debt and enhance
investors’ ability to view the Company’s results from management’s
perspective.

Gain on divestitures: We periodically
recognize gains on divestitures, including in fiscal 2018 related to our
WSS and PKI solutions. We have excluded these gains for purposes of
calculating our non-GAAP results. We believe making these adjustments
facilitates a better evaluation of our current operating performance and
comparisons to past operating results.

Gain (loss) from equity interest: We record
gains or losses in equity method investments representing net income or
loss attributable to our noncontrolling interest in companies over which
we have limited control and visibility. We exclude such gains and losses
in full because we lack control over the operations of the investee and
the related gains and losses are not indicative of our ongoing core
results.

Income tax effects and adjustments: Prior
to the third quarter of fiscal 2018, we used a projected long-term
non-GAAP tax rate that reflected the elimination of the effects of the
non-GAAP adjustments to our operating results described above and
significant discrete items, as well as certain unique GAAP reporting
requirements under discontinued operations as a result of the sale of
our information management business (Veritas) in order to provide better
consistency across the interim financial reporting periods. Starting
with the third quarter of fiscal 2018, as a result of U.S. tax reform,
we use a non-GAAP tax rate that excludes (1) the discrete impacts of
changes in tax legislation, (2) most other significant discrete items,
(3) certain unique GAAP reporting requirements under discontinued
operations and (4) the income tax effects of the non-GAAP adjustment to
our operating results described above. We believe making these
adjustments facilitates a better evaluation of our current operating
performance and comparisons to past operating results. Our tax rate is
subject to change for a variety of reasons, such as significant changes
in the geographic earnings mix due to acquisition and divestiture
activities or fundamental tax law changes in major jurisdictions where
we operate.

Discontinued operations: In August 2015, we
entered into a definitive agreement to sell the assets of Veritas to
Carlyle. The transaction closed on January 29, 2016. The results of
Veritas are presented as discontinued operations in our Consolidated
Statements of Operations and thus have been excluded from non-GAAP net
income and segment results for all reported periods.

Diluted GAAP and non-GAAP weighted-average shares
outstanding: Diluted GAAP and non-GAAP weighted-average shares
outstanding are the same, except in periods that there is a GAAP loss
from continuing operations. In accordance with GAAP, we do not present
dilution for GAAP in periods in which there is a loss from continuing
operations. However, if there is non-GAAP net income, we present
dilution for non-GAAP weighted-average shares outstanding in an amount
equal to the dilution that would have been presented had there been GAAP
income from continuing operations for the period.

Reported billings (previously referred to as
implied billings): We define reported billings as total revenue
plus the change in adjusted contract liabilities. The change in contract
liabilities excludes contract liabilities acquired or divested during
the period as well as the change in contract liabilities related to
discontinued operations that does not amortize to revenue from
continuing operations. We consider reported billings to be a useful
metric for management and investors because it facilitates an analysis
of changes in contract liabilities balances that are an indicator of the
health and visibility of our business. There are several limitations
related to the use of reported billings versus revenue calculated in
accordance with GAAP. First, reported billings include amounts that have
not yet been recognized as revenue. Second, our calculation of reported
billings may be different from other companies in our industry, some of
which may not use reported billings, may calculate reported billings
differently, may have different reported billing frequencies, or may use
other financial measures to evaluate their performance, all of which
could reduce the usefulness of reported billings as a comparative
measure. We compensate for these limitations by providing specific
information regarding GAAP revenue and evaluating reported billings
together with revenue calculated in accordance with GAAP.

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