Q3 2020 Earnings Call
Welcome to Norton Lifelocks fiscal third quarter 2020 earnings call all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session at that time, if you'd like to ask a question to me do so by pressing star.
Entered the Q, if you'd like to withdraw your question first the boundary. Thank you I would now like to turn the call over to the head of Investor Relations to one Kim. Thank you you may begin.
Thank you I'm pleased to walk me through our call to discuss our third quarter fiscal year 2020 earnings result.
We posted hearings material on slides.
Investor Relations events Web page speakers on today's call I've been since a lot Norton Lifelock CEO some of your Korea, President and Matt Brown interim CFO. This call will be available for replay via webcast My website.
As a reminder, in connection with the sale of certain assets of our enterprise security business to Broadcom on November four 2019.
Team.
You choose our for Britain interest from Symantec's Norton life [laughter]. The results of our enterprise security business were classified as discontinued operations in our condensed consolidated statements of operations and does exclude it from continuing operations and segment results for all periods presented.
Starting in the second quarter fiscal 2020.
Operating in one reportable segment.
Revenues and associated cost of our Ideate analytic solutions, which were formally including the enterprise curious segment are now included in our remaining reportable segment on January 31st 2020, we completed the sale guar I'd analytics solutions I like to remind everyone that all references to.
Actual metrics, our non-GAAP unless otherwise stated please refer to the supplemental materials posted on the Investor Relations website further that punished definitions of our non-GAAP metrics.
Please note Nongaap financial measures reference during this call a record south or comparable GAAP financial measures in the press release and supplemental materials personnel website.
We believe our presentation of non-GAAP financial measures when taken together with a corresponding GAAP financial measures provide meaningful supplemental information regarding our operating performance for reasons discussed below our management team uses these non-GAAP financial measures and especially our operating results as well as planning and forecasting future periods.
We believe our non.
GAAP financial measures also facilitate comparisons of our performance to prior period isn't that investors benefit from understanding our non-GAAP financial measures Nongaap financial measures a supplemental should not be considered as a substitute for national information presented in accordance with job.
Today's call contains forward looking statements based on conditions, we currently see.
These statements are based on current beliefs assumptions and expectations speak only as of the current state and as such involve risks and uncertainties that may cause actual results could differ materially from our current expectations.
In particular, our statements regarding our sale of our enterprise curiosity to Broadcom and.
He has dissipated benefits from such.
Ill and cost reductions associated with this transaction is subject to a variety of risks.
Please refer to the cautionary statement in our press release for more information, you'll also find a detailed discussion about our risk factors in our filings with the FCC and in particular, our annual report on form 10-K for fiscal year ended March 29, 2019, and recently filed one.
Reports on form 10-Q, let me now I'll turn the call over to Vincent [laughter]. Thank you see one and good afternoon, everyone. I'm very pleased to report that we delivered better than expected to result in Q3, the first quarter off northern Lifelock as a Standalone company.
We delivered revenue above the high end of the range supported by bookings.
Growth of 4%.
S was 25 cents up nine cents from a year ago, and well above our guidance.
Even by strong execution and lowest blended cost.
We have actually the weighted our transition to become the pure play leader in consumer cyber safety and we are driving towards <unk> annual target.
$1.50 cents EPS.
We have delivered on our commitment of returning more than 100% of the net proceeds from the sales of our enterprise business to broadcom by being a $12 per share special dividend on January 31st and starting at 1.6 billion dollar share repurchase program.
In December.
Before I go into more detail I would like to thank all of our employee.
Achieving these results in a quarter in which we completed the sales of our enterprise business is another testament to the operational discipline and the dedication of our team.
These encouraging results speak for themselves.
But let me give you a few more details.
Since the close of the sales of Entre probably the business on November 4th we have been removing stranded cost at the next had a weighted basis.
Previously estimated cumulative stranded cost post close were $1.2 billion with cash cost of 900 million to remove.
These trended activities.
We have exit or we do that transition to be done in Q2 fees could you at 21 three month ahead of plan.
Cumulative stranded costs, both gross I know trucking to less than $1 billion in total.
Of which 750 million are in cash.
We are making good strides.
So what's exiting or rightsizing, the cosby's to achieve target operating margin of 50% for the total company by the end of the transition period.
In addition, we made significant progress towards our goal to monetize and dispose off underutilized assets to more than offset this trying to cash cost.
We recently closed the sales I thought I'd analytics business for $375 million in cash.
In addition, we received the first round of bids for the sales so far soon to be vacated properties, including Amundsen view campus.
We now project the cash proceeds from the underutilized assets to be approximately.
Nearly $1.5 billion significantly higher than the 1.1 billion. We previously estimated on our last earnings call.
When you combine that then one 7 billion sales of the enterprise business with a 1.5 billion in monetization. If I said lets the 750 million is trying to cost.
We project a generated roughly $11.5 billion in gross proceeds directly or indirectly related to this use of our enterprise asset.
Wow I know Rick wouldn't be very proud.
Even after taxes, which I know lower than initially expected and the return of a substantial amount of cash to our shareholders.
In the form of dividends and stock buybacks, we're left with meaningful capacity to invest and sustainably grow a consumer business.
When I started as CEO I talked about some key priorities for us in the short term.
First establish credibility like consistently delivering on what we say.
Secondly, accelerated transition to quickly get to a long term business model was 50% profitability for the company.
And lastly, and more importantly, free up investment capacity to returned the company to sustainable growth delivering on the full potential for Standalone consumer business.
I also said that.
It would take time to reach our full potential.
I think it goes without saying that we have delivered on that commitments in terms of executing on the sales of the enterprise business accelerating determination of stranded cost and maximizing the value of our underutilized assets as for the ongoing consumer cyber safety business this quarter.
We delivered bookings growth of 4% year over year and increase net subscribers by 66000 sequentially, while maintaining operating margin over 50% when you exclude the impact of stranded cost.
It is the first positive quarter off net customer ads in the long time, but to be fair one quarter does not make a.
While customer count is stabilizing our focused execution and we pride that seems vestments have us on the right path to deliver long term sustainable growth.
Our strategy is working.
I will pass now the call over to my business partner Samir for more details on our product initiatives and selling motion.
Thank you Vincent.
Our momentum in launching Norton Threesixty memberships worldwide continues and the third quarter, we expanded our membership offerings in EMEA Asia Pacific and Latin America, including Ireland, South Africa, Australia, and Mexico, We remain focused on our strategy to deliver increasing value to Norton lifelock members by offering a broad.
Ross said of cyber safety solutions.
Third quarter average revenue per user or ARPU increased to $8, a 99 cents per month up 1.2% sequentially and up 2.7% year over year.
More importantly, we saw continued stabilization of our direct customer count.
We grew customer count sequentially this quarter for the first time in more than two years, we added new customers at the top of funnel, while maintaining our high retention rates I Sarvis safety message is resonating with customers. We believe the growth in customers directly results from our strategy to invest and drive consumer awareness.
After the value of our offering.
In addition to our direct customers. We also protect millions of customers through indirect relationships, we've established through partnerships around the world, including telcos employee benefits retailers and Etailers.
One example is a recent partnership agreement, we signed with a large telecom service provider.
We will be bundling, our new membership product powered by Lifelock.
This will be the first time, we'll be launching the full version of Lifelock, which includes identity restoration outside the United States.
We're starting to see more and more of these organizations understand how much value cyber safety can bring both their businesses and their customers.
These relationships contribute to our foundation for growth in the future.
We're continuing to invest in our product capabilities to address cyber threats that are evolving at a fast pace. Let me highlight two examples of identity offerings that we launched in the quarter.
In December we launched home title alert this.
I will feature is available to our U.S. members, who subscribe to the highest level of identity protection.
For many Americans their home is there most valuable asset and we're helping protected from fraud. We're now monitoring for changes to their home title and tax records at the County Recorders office.
With this service members.
Our learned when potential scammers use victims identities to take out fraudulent loans or place liens on a victims home for financial benefit.
This is one of many examples of our continued focus on innovation to deliver additional protection to our members across security privacy identity and home.
We.
So we expanded our identity theft offering outside the U.S. with the launch of our dark wed monitoring service powered by Lifelock in Japan.
The dark web isn't an index part of the Internet and it is a hotbed of criminal activity were criminals can buy and sell stolen information.
When we detect our members.
Nation on the dark web we alert our members. So they can take action. This product has seen good adoption in that market and we're working hard to deliver it to consumers around the globe.
Those are just two examples of leading innovation, but we have a robust R&D pipeline of products that we believe will help keep our customers cyber safe.
Let me turn the call over to map to discuss Q3 actual results in more detail.
Thanks Amir.
Let me review, our Q3 results in a bit more detail focusing on non-GAAP results.
Q3 revenue was 618 million up 1% year over year in constant currency and above.
Our guidance range of 602 to 612 million.
I'd analytics revenue was included in both actuals and our guidance and landed at 15 million for the quarter.
Diluted EPS was 25 cents exceeding our guidance range, driven primarily by better than expected.
Costs and RPL.
Operating margin was 36.2% compared to 28.6% in Q3 19.
We drove strong margin performance by reducing stranded costs.
In just one quarter, we reduced our head count by 52% and.
Recently reduced our real estate footprint, making substantial progress on Rightsizing our company for the go forward business.
Well progress was made Q3 continuing operations included stranded operating expenses of approximately 85 million.
As we stated on our prior quarter earnings.
Call. During this transition period are reporting cost structure will be complex and burdened with stranded costs. The timing of the transition the net costs associated with our transition service agreements asset write off and the location of these costs in the piano will impact.
Operating margin and or EPS for the next three quarters.
For example, depending on the underlying nature of these costs. They may be recorded an operating expenses of continuing operations or transition services expenses, which are included below the line in other income and expense or.
Discontinued operations or restructuring, which are excluded from our non-GAAP results altogether.
Because of this complexity, we're providing detail on the approximate amount and location of stranded costs incurred in the quarter in our earnings deck posted on our Investor Relations website, which I.
Everyone to review.
In Q3, our cash flow from operations was $399 million with free cash flow of 389 million.
These amounts include cash flow from continuing and discontinued operations, which also includes stranded costs and benefits.
Buffeted from collections of enterprise related receivables in the quarter.
By the way the estimated tax liability on the enterprise sale is now estimated at 2.2 billion versus the 2.5 billion estimated at the time of the deal.
The majority of this tax liability is left to be paid in Q4 20.
Okay, and therefore will be reflected in that quarters cash flow from operations.
We ended the third quarter with cash and short term investments of 12.8 billion.
And our total debt level was unchanged at 4.5 billion.
Our strong cash flow has enabled us to return a significant amount of cash to our.
Shareholders.
In Q3 under our 1.6 billion share buyback plan, we repurchased 14.1 million shares for 364 million in cash.
In addition in Q3, we paid our recently increased regular quarterly dividend of 12, and a half cents per.
Our share.
And lastly, we recently completed the previously announced special dividend of $12 per share.
We will continue to return cash to our shareholders, while maintaining our ability to invest in growth opportunities.
We now expect our estimated cash balance at the end of the transition.
To be over two and a half billion as a result of lower expected cash transition costs.
Lower expected cash taxes on the enterprise sale.
Lower cash paid on the special dividend due to timing of our share buyback and higher expected cash receipts from the sale of.
Underutilized assets.
All told this has significantly increased our cash expectations and allows greater flexibility to create more value to invest and sustainably grow the business as well as gives us the option to deploy additional capital as we opportunistically manage.
A question.
Let me now turn the call back to Vincent to provide our Q4 outlook. Thanks, a lot very clear let me now provide our Q4 outlook and also discuss our long term growth strategy for Norton Lifelock.
The fourth quarter, we expect revenue in the range of 595 million to $605 million excluding iden.
Thanks, which closed in January.
We will continue to drive the business for growth, which is expected to continue to yield low single digit bookings growth in Q4, ultimately delivering revenue growth in later quarters.
We expect Q4, non-GAAP EPS to be in the range of 15 cents to 20 cents per share based on assumptions here.
Not share count with the business operating at approximately sorry, 50% profit margin when excluding the stranded costs.
As we exit our transition period upon that ammunition of the stranded cost and we the full benefit from share buybacks, we expect the operating margin to reach 50% annualized EPS.
Who come to approximately a $1.50.
Fiscal year 2020, so as we turn to previous marketing investment levels, primarily targeted a direct acquisition programs in the U.S. and worldwide.
We will continue to invest in our distribution and product roadmap.
While these initiatives take time to generate revenue.
We are encouraged to see two consecutive quarters, how 4% billings growth year over year.
We believe Norton Lifelock is well position to continue our market leadership by offering a simple reliable path to cyber safety.
Mission to protect our customers digital and connected lives is reflected in.
Commitment to make the world safer.
Our transformation is well underway.
We have become much more nimble and customer focused and we are on track to achieve our near term goals to remove stranded cost and lay the foundation for growth.
For our mid to long term goals, we're excited by the opportunity to.
Innovative solutions to protect consumers and produce sustained revenue and earnings growth, we strong cash flow generation for shareholders.
As I told all of our employees it will not be a linear path they will be changes along the way, but the opportunities tremendous and our focus is on protecting.
Okay, and delighting consumers with innovative solutions.
And with that Matt Let me when I now happy to take your questions.
Ladies and gentleman at this time, if you like to ask a question you may do so by pressing star followed the number one on your telephone keypad, if you'd like to withdraw your question Sapanski.
These ensure that you pick up your handset when asking a question for the best audio quality and the interest of time, please limit yourself to asking one main question and one follow up question. So we can make sure we get to everyone.
Our first question is one of the team up Boolani from yes, but DEMA.
Good afternoon. Thank you for taking the questions.
And so maybe I'll start with you just to get a progress update on the membership bundle a conversion of the install base you have about a year at data points here as you move the base to the membership model. So I was wondering if you could sort of update us as to how you're tracking along that path and maybe if you can give us a little bit more.
More color as to how the conversions are landing whether they're in sort of the below bucket or the very premium bucket that would be really helpful. And then I have a follow up Matt.
Thanks for theme.
Yes, as we as we rolled out last April our cyber safety programs, which includes security.
Identity privacy and home and family we've been moving.
Both our existing customer base into that bucket as well as acquiring new customers into that combined solution both of which have progressed well I think we share the data on that progression on an annual basis, and we're very happy with the.
The results. We've we've had over this year. So next quarter, we'll be sharing the the percentage of existing customers.
Moved into that program, but in addition to that as I mentioned my opening remarks, we have also rolled out new identity protection capabilities in international markets like the dark web monitoring in Japan and.
And soon to be released identity threat restoration service in another country. So what we're seeing is the combination of capabilities and value. We're providing are resonating with our customers and that's resulting in both the ARPU as well as retention you've seen in our reporting today.
Thank you enough for you.
Very helpful color around the go forward or normalized capital structure, if you will but I'm wondering just kind of given the mechanics around the convertible notes on the balance sheet.
With respect to the dilution that's come online as a result of those notes and the buyback that you haven't place I'm wondering if you can kind of step us through how.
We should be thinking about a share count and share count dilution mechanics going forward. Thank you.
Sure.
Yes, so as Vincent mentioned in his outlook remarks, we are modeling flat share count quarter over quarter.
So our Q4 guidance incorporates our expected dilution.
And also with the offset of our share buyback program and as we move forward as that as the dilution from our converts.
Continues we have the ability to opportunistically manage that through additional share buybacks and and so that is built into our model.
And our next question its line of Saket Kalia from Barclays. So again.
Hey, guys. Thanks for taking my questions here.
They've been central.
And so maybe maybe just start with you you talked about some of the some of the incremental investment.
The team is putting into.
Additional marketing programs.
Just to help drive some of the improvement that we're seeing in bookings in the topline.
I guess my question is are those investments.
The type that you think we can leverage or do you think that we need to increase than potentially to sort of sustained this improved growth.
Yes, so as we mentioned in prior quarters right Weve increased.
Our marketing investment to go back to prior levels that really true. We said self actions. We've done we still see investment to first one was we need to move from long form.
Marketing to social media and other new area in which we had not been marketing in the past so.
Thats one one than share for the second one wants to really move from.
Mainly being user centric to be more international we've been growing and you about we've been growing new capacity can that of course is to support new product product launch.
So those are important factor and then weve.
Nine our marketing investment to the rollout of northern to 60 membership structure.
Making our customer aware of the incremental value we provide them through the membership.
When you raised the the noise level, if you wanting to market awareness level in the market you have a long way to go in term of improving the productivity of those marketing investments. So I do believe that's one we've wasted queuing.
Fiscal you had 20, we have opportunities to gain productivity from those investment going into fiscal year 21.
Got it got it Matt maybe for my follow up for you.
Can you just talk a little bit about the mechanics of the transition services agreements or T assays how much.
Well when did those start.
Sort of start to kick in you mentioned that those go below the line when do those start to kick in what sort of magnitude and for how long broad brush as if you kind of.
Sure. So our transition services agreement began right. After the close of the transaction on November 4th and those continue for about six months so expect those.
Continue until about May 4th.
The cost of those transition services agreements are included down in other income and expense, but so are the offsetting.
Reimbursements from Broadcom, which which offset the expenses.
That are down and in other income and expense. So those will continue.
All the way through May 4th at which point, we will exit.
And those amounts will then come out of other income and expense going forward and so I can just so we believe we have multiple TSC agreements depending on the function on their way out of countries.
And so they have different timeline time off of stoping once the service over than needed a cost you may be shut down all come back into the normal opex until we shut them down so definitely a dynamic PNM and.
We focusing mainly on the getting towards the end of the transition period, making sure that 100% of those stranded costs have being.
Yes, I could you asked a specific question around amounts.
It was as we've indicated in the in the Investor Relations deck at 65 million is included down in other income and expense and that is offset by the income that we're getting.
Very helpful. Thanks, guys.
And our next question.
Line of Brad Zelnick from Credit Suisse Brad.
Hi, Brad Thanks, so much hi, Vinson how are you.
Very good.
Very nice quarter congratulations.
My first question for you I would like to drill down into the marketing investments a bit.
If you can help us better understand which.
Channels, you're seeing the best conversion from and and perhaps the demographics of the incremental customers that you're adding.
Yes, so we.
We have our traditional long form investment TV radio et cetera, those have been very efficient low cost again and strong we can continues.
To be that way we.
We now have redirected some of the market investment to social media and other new avenues.
And we see early success and sign off of newness. If you one going into those channels. So we continue to invest money into that and optimize our customer acquisition.
Cost as we as we learn about those channels when do I didn't think semi on that you just dovetailing on that we're focused on moment of truth marketing to grow our customer base first and foremost and although TV and radio are important parts of our funnel. We've added the investment into new digital media, so adjustments and shared social but also.
It's engine optimization and mobile and while our focus investing in those channels. It's also investing in international performance marketing, including Europe and in Asia.
And as you know with a Norton Lifelock and our check Mark we have a very powerful brands. So most of our marketing investments is to take that.
That trust brand and channel. It is so that people are more where around our cyber safety solutions and drive customer growth from that.
Thank you so much somebody that's actually very helpful.
And if I could just follow up for for Matt I suppose it's good to see how well ahead of plan you all are on eliminating stranded costs now less.
The $1 billion versus the original estimate of one of the half billion can you just maybe help us understand what's changed and is there even a chance that that number might come down further from here.
So I don't want to commit to getting faster than what than what we've already done, but I'm happy that we were able to accelerate the elimination.
One of those stranded costs.
And and so what we've seen as we've pulled forward some of those actions.
Earlier than had been expected.
And as a result, now we've been able to to lower the amount the cumulative mounts post transition to just under 1 billion, but I think thats, where we'll leave it for now.
Okay excellent. Thanks, so much for taking my questions nice job.
Thank you.
And our next question, it's one of Walter Pritchard from Citi Walter.
I wanted to.
Hi, Thanks, Hey.
Couple of questions one around.
The walls or or dealers for sure.
Earn any commentary there on the Saudi changes and then I'm curious how you're thinking about.
Channel the PC OEM channel going forward as as an avenue for acquiring customers Yep. So two things on renewal, we share every quarter, but we shed that I think one or two quarters ago that were around a slightly under 80.
5% the renewal rates have been extremely tables.
Overall renewal book at those as can you tell contributed to the growth overall, so so good stabilization the the second comment around.
Lets call It Avenue, a distribution of of the grows and going into.
You have we to reach customers, we mainly abuse the direct to customer acquisition on distribution company, but we look at or aspect on the OEM side, we have the well have why don't you as you know when we look always at.
All options on making sure that we we do.
Not overlook anything.
We have no specific plan to share today.
Will we continue to look broadly at always to reach our continues.
Okay. Thank you.
And our next question just one of Gregg Moskowitz from Mizuho Securities Greg.
Hi, Greg. Thank you very much hi, guys. So a bit of a follow up to two brad's question as you alluded to in your prepared remarks. This is the first time in a while in which the the number of subscribers increased sequentially by my count at least 10 quarters, and Vince and it sounds like the ROI from the increase marketing focus will probably be seen more in fiscal two.
21, but I'm just wondering what you would say is the primary driver of the improvement in subs at this stage.
Yeah. So so couple of.
Come into the first one if you rides the first once these Q2 thousand 18, when there was a breach we see equifax if you'll remember so it seems the first point of view, we viewed on Thunder.
We are growing sequentially structurally we saw the specific even being driven in the markets, which I think is very very encouraging now it's still quality doors that we grew 66000 than sequentially I would feel according to that kind of stabilization mode.
In the early sign of success has been mainly of raising the marketing investment.
Two then review, where we are marketing, our our products and making consumers aware of the need and the product so moving into new channels that we discussed and moving internationally and then after all because we are a product company abuse. The kaniewski launching new products and said, we had talked about the new functionalities.
As noted we 60, a new concept for membership fee you can access to all of the functionality, so I'm not portfolio in that but we need goodwill option.
Okay Fantastic that's really helpful. And then just a follow up or you are showing any progress on upselling at the point of renewal or do you see a realistic opportunity to I picked at higher going forward.
So.
The first objective for us outside of growing a consumers is really to move and increased the adoption off on northern Threesixty membership structure, we launched that in April so as Fatima mentioned earlier looking to hit the the one year renewal event.
And.
At different points of the life cycles, we have the opportunity to continue to demonstrate high value and upset.
Great. Thank you.
Once again, ladies and gentlemen that star one on your telephone keypad, if you like to ask an audio question.
Our next questions wind of Keith Weiss from.
Again Stanley Keith.
Excellent. Thank you guys for chicken.
Sure I think going guys.
Thanks for taking the question and Im very nice quarter.
One question I kind of dig and then again kind of the Brad Zelnick.
Vein, but on the other studies equation in terms of your ability to monetize.
Some of these stranded assets and that number going up is that the result of kind of what you've been able to realize already or are you kind of revising your estimates on some of the remaining assets on a going forward basis.
Yes. So a question now most of it the so we sold a few assets that.
A partial ownership in indeed, you said business I'd analytics, and then we revising based on the price at which we sold those assets plus the first set of offers that we got for most of our facilities that we put four sales.
Got it.
And then on the.
On the core business on the.
[noise] ARPU side of equation any improvements that you're seeing there can you help us on pack a little bit of kind of where those are coming from.
What sort of.
How much of that comes from sort of mixed shift towards some of the higher price solutions how much.
At any is coming from just absolute price increases you're putting it against the product or less promotions against the product. It gives a better understanding of the durability those ARPU increases.
Hi, its samir so as we discuss a little earlier cyber safety and the rollout of the.
Combined membership.
Offering has been our focus and and with that security privacy identity in home capabilities. They do have a higher ARPU and as we add those capabilities, we're seeing more and more for our customers adopt.
That solution set and that's reflected in the ARPU increase as well as the.
Retention comments that that.
Instant shared earlier.
And above and beyond that.
User growth is our priority in multiple geographies in multiple geographies. So those are both high ARPU geographies, but as we focus on on user growth. We might also be looking at lower ARPU cohorts, specifically to adopt a higher volume of users.
Got it that's super helpful. Thank you guys.
Yes.
And our next question is one of Carl Kierstead from Deutsche Bank Carl.
Hi, Thanks, I've got to Yeah, Hi, I've got to revenue growth and a cash flow question I'll I'll ask both at once so you you highlighted you just put up your second consecutive quarter of a 4%.
Growth in the core business and I guess my question. There is whether your confidence level that that can be a catalyst for you to achieved revenue growth in the consumer segment of mid single digits sometime in fiscal 2001 is now greater and then all on the cash.
Side, you outlined Z stranded cost.
Impact on Opex and other income a combined a 150 million, but what was the impact on free cash flow.
You reported 389 million so that we can get some sense of how the core businesses.
Towards your goal of 900 million in run rate. Thank you.
Yeah. Thanks, Thanks for the two questions had started with with the growers.
You know bookings rose, 4% for now two quarters in a row.
Customer count growth, our two very good leading indicators of the future state of the business.
And what it will mean for the revenue.
Nine which is more from the accounting line.
If you go back to the end of fiscal year.
19.
We had revenue declined we had deferred balance decline and we had customer come decline and what you see today in the.
On the rubber new line is the impact of those matrix 12 months ago.
So obviously as as I mentioned booking growth and <unk> was our two operational matrix that we are really driving for and achieving these results I would say our early sign of success I will not call them, yet sustainable growth, but that definitely encouraging sign that we on the right path.
Deliver on our strategy.
Of the cash flow you you mentioned the the the cost on the continue the operations P. and then you also have this can't use operations and restructuring all of which impact cash flow and this quarter. In Q3. We also have the collection of the accounts receivable.
From the enterprise segment since the.
A deal from both come did not take the E.R. and that were pre clothes. So it was really a a higher quoted you too that when we feel down our cash flow statement and look what is linked to our consumer business. We went on to try to deliver on 900 million free cash flow.
A new last for the court, if you want or by the end of the transition period.
Okay very helpful. Thank you. Thank you.
And our next crushers line of <unk> from Oppenheimer and company job.
Action. Thank you.
Good afternoon, congrats on the solid results.
Vincent one one of the views supporting the.
<unk>.
Some of the next generation and points 80 providers is that they are displacing some of the legacy providers semantic included.
Within that list.
Should we expect that you two starts and and change going forward. If you can sustain this level of performance your view.
I'm not exactly sure what you refer to you, but I really want to detach our view as and following security provider and much more back to the membership Northern 360 of course off or security is a basic view for you and point devices, but also offer privacy to a V.P.N. offering.
It offers identity protection now moves internationally with dark what monitoring and who are much more company offering a cyber safety membership if you want creating and helping to design that category is a new category for for consumers.
Fair enough understood and my follow up I'm interested actually in your <unk> product created question that dark web that throughout client are these sensors that that you're sitting in the dark web is it more analytic strip and what's what's the exact product could be.
Two lives is is at home grown and well what's the go to market strategy associated with this product. Thank you.
That's a great question <unk> as you know identity protection is growing need for consumers around the world and one of the key platform stolen information exchanges on the dark web, but our secret sauce is the question you're asking and the answer is yes. We we we have all different ways in which we are monitoring the dark.
End of the day being able to bring a dark web capability to our customers around the globe requires us to have a robust way in which we monitor for P.I. potentially being stolen and sold in in the dark web and what our focus is and how we get that information real time to our consumers so they're alerted.
Able to take action on it.
Thank you.
And ladies and gentlemen at this time, we have no further questions I'd like to turn it back over to visit plus for closing remarks.
Thank you thanks for joining us today, well there was allowed to feel good about our transformation will not be linear we still have ways to go to deliver sustainable growth and delight, our customers, we need to keep delivering innovative solutions to make the world cyber save I am confident that this team can build on early signs.
Of success. These first quarter inspires us to reach our full potential has the puberty leader in consumer cyber safety.
It is an exciting start for journey has known in Lifelock.
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Ladies and gentlemen, this does came through today's conference call. We think you drink leave for joining us for Norton Lifelocks fiscal third quarter 2020 earnings call me down disconnect.
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