Gen Digital Inc.

Good afternoon, everyone. Thank you for standing by. My name is Paul, and I will be your conference operator today. I would like to welcome everyone to the Norton LifeLock Fiscal 2021 Second Quarter Earnings Call. Today's call is being recorded, and 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. I'd be fine for opening remarks. I would like to pass the call over to Ms. Mary Lai, Head of Investor Relations. Ms., you may begin.

Thank you, Paul, and good afternoon, everyone. Welcome to the Norton LifeLock Fiscal 2021 Second Quarter Earnings Call. Joining me today to review our Q2 results are Vincent Pellet, CEO, and Natalie Dursey, CFO. As a reminder, there will be a replay of this call posted on the Investor Relations website, along with the earnings slides, press release, and supplemental materials defining our non-GAAP metrics. I'd like to remind everyone that during this call, all references to the final metrics are non-GAAP and all growth rates are year-over-year unless otherwise stated. A reconciliation of non-gap-to-gap measures is included in our press release, which is available on our IR website at investor.nortonlifelock.com. Today's call contains statements regarding our business, financial performance, and operations, including the impact of the ongoing COVID-19 pandemic on our business and industry, which may be considered forward-looking statements, and such statements involve risks and certainties that may cause actual results to differ materially from our expectations. Those statements are based on current beliefs, assumptions, and expectations, and speak only as of the current date. For more information, please refer to the cautionary statement in our press release and the risk factors in our filings with the SEC, and in particular, our annual report on Form 10-K for the fiscal year ended April 3rd, 2020, and recently filed quarterly reports on Form 10-Q. And now, I will turn the call over to our CEO, Vincent.

Thank you, Mary. Good afternoon, everyone. I hope you are all safe and well. Before we begin, I want to thank our employees and our partners for the hard work and dedication to help protect consumers as more and more of our everyday lives move online. We know that cyber criminals are taking advantage of this shift, and I'm proud of our team for continuing to design products and release features that support our vision of cyber safety for everyone. And to our loyal 50 million customers, thank you for trusting us to secure a growing portion of your digital activities. In Q2, we delivered reported billings growth of 7%, revenue growth of 5%, and EPS growth of 100%, closing out a strong first half of fiscal year 21. Our revenue now exceeds $2.5 billion in annualized run rate, and we are beginning to string together strong quarters where we meet our target of mid-single-digit revenue growth, while at the same time delivering solid operating leverage. Let me unpack a little bit on the top line. Our direct-to-consumer business, which represents 90% of our business, was up 5% in Q2, with broad-based growth across the entire portfolio. We now have over half of our installed base on Northern 360, and we will continue to release new products, such as dark web monitoring or privacy monitor assistant, either as add-on features or standalone products. Our goal is to constantly bring new value to our subscribers around the globe and keep them cyber safe across their growing digital activities. We also continue to invest and expand internationally, with international growth slightly ahead of the Americas. Direct acquisition grew double digits in many countries, such as the UK, Italy, and Spain in Europe, and Australia and Japan in APJ, just to name a few. With less than 30% of our revenues outside North America, we remain relatively underpenetrated in many countries, offering us an opportunity to broaden our reach. Partner revenue, which represents 10% of our business and includes relationships with telcos, retailers, and employee benefits brokers, grew 7% in Q2. While retail remained weak during this period, we delivered double-digit growth in the employee benefits program with strong signings of new employers and strong retention rates across broad sectors. Overall, we continue to develop our partner relationships to increase the reach of our solutions to all consumers. We are currently working on rolling out and expanding our solutions with some of our more recently announced partners like AARP in U.S., or Telus in Canada. Internationally, this quarter, we also signed a telco deal in Europe and had a key retail win in Japan. These relationships take time to build, but they are an important part of our long-term growth opportunity. As you all know, we've put a lot of focus on growing our direct customer count, which now totals 20.7 million. This quarter marks our fourth consecutive quarter of net customer ads sequentially and the second consecutive quarter of net ads year over year. Since we became a standalone consumer company a year ago, we have welcomed over 3.5 million new customers. While we know this is just a drop in the bucket compared to the opportunity to bring cyber safety to everyone, it is a meaningful change from the years of declining customer count when we were part of Symantec. Our customer retention rate, a unit retention metric, remains stable at 85%, and our monthly average revenue per user remains strong at over $9. Our integrated platform, Norden 360, resonates well with consumers who face multiple challenges to their digital lives and prefer comprehensive protection plans. we will continue to drive customer acquisition and engagement through marketing investments, partnerships, and more importantly, product innovation. We are focused on both developing great products and bringing an integrated platform to consumers to provide cyber safety while we work, learn, shop, or socialize online. For example, with the rise of gaming and esports, we saw an opportunity to help gamers protect and control their accounts, their personas, and digital goods. We developed a customized solution, Northern 360, for gamers, designed by fellow gamers at Northern LifeLock. We know gamers prefer to focus on playing, not worrying about cyber criminals, so we felt there was a real need to bring comprehensive cyber safety to the gaming world. While our solution delivers many of the features you would expect, like threat detection, firewall, and password manager, we've gone further and included dark web monitoring for gamer tags, a first for the industry. With this feature, we will monitor and notify you if we find your personal information on the dark web, including your gamer tags, user IDs, or passwords, protecting your virtual boots acquired in games. Another dramatic change in our everyday lives has been in how our kids learn. whether it be for school or other educational activities, so much more of this is now done online. A recent study shows that the majority of parents say their kid's screen time has skyrocketed during the COVID-19 pandemic. And unfortunately, over half of the parents said that they now just accept certain risks to their child's online safety. To help make life a bit easier for parents, this quarter, we introduced Nolan360 with LifeLock for Family, an all-in-one plan to help protect the entire family's devices, identities, and online privacy through one subscription fee. This family plan also includes a new feature called School Time, which helps children stay focused on schoolwork while remote learning by managing access to the broader web. So sorry to kids, no gaming during school hours. While the threat posed by the availability of your personal information online is not new, The shift of more and more of our lives online makes privacy as important as ever. Recently, we've expanded our privacy offering with Privacy Monitor Assistant and made it easier for consumers to reclaim control of their personal information and defend against identity theft. Data brokers collect and profit from all your data they compile, such as your home address, phone number, employment information, and social media profiles. Privacy Monitor Assistant helps automate and take the guesswork out of removing your personal information from the internet. These are just a few examples of how our innovations are keeping consumers cyber safe. And there is definitely more to come as we build cyber safety for everyone. Growth and innovation are our primary focus. But it's worth noting that as of the end of August, we had removed all stranded costs related to the sales of our enterprise business. This was four months ahead of plan. I want to thank our transition team for making it possible, and we're now building operational execution into our DNA. And with the transition behind us, We have reaffirmed our partnership with Broadcom by licensing the Symantec Enterprise software and security engines, as well as continued sharing threat telemetry and analytics. We are very well positioned for the future. Before I pass it to Nathalie, I also want to recognize our responsibility to help create a safe and sustainable future. Yesterday, we released our first corporate responsibility report as Northern LifeLock. We encourage you to read the report and learn about how we view corporate responsibility and support our communities. Those efforts were just recognized last month by Forbes and Just Capital. It is an honor to be named one of America's most just companies and be recognized for our commitment to serve all stakeholders with integrity and accountability. We also know we have so much more we can do in this area, and we will stay committed to corporate responsibility and contributing to building a cyber-safe world. And now let me turn the call over to Natalie for more details on the financial results. Natalie.