McAfee Corp.

Thank you for standing by, and welcome to McAfee's Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your host, Vice President, Investor Relations, Eduardo Flates.

Thank you, Operator. Good afternoon, and thank you for joining us today to discuss McAfee's second quarter earnings results for the period ended June 26, 2021. Participating on today's call are Peter Lee, President and CEO Venkat Vamidipati, Executive Vice President and Chief Financial Officer, and Ashish Agarwal, Senior Vice President of Strategy and Corporate Development. Earlier this afternoon, McAfee issued a press release announcing its financial results. While this call will reflect items discussed within that document, for complete information about our financial performance, We encourage you to read our 2020 annual report on Form 10-K for the fiscal year ended December 26, 2020, and our quarterly report on Form 10-Q for the fiscal quarter ended June 26, 2021, which we filed today with the Security and Exchange Commission. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions. These forward-looking statements reflect our opinions as of the date of this call, and we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors, that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our most recent annual report on Form 10-K and our quarterly report on Form 10-Q filed today with the Securities and Exchange Commission, where you will see a discussion of factors that could cause the company's actual results to differ materially from these statements. A replay of this conference call will be available on our website under the Investors Relations section. I would also like to remind you that during the call, we will discuss some non-GAAP measures in talking about McAfee's performance. You can find reconciliation of those measures to the nearest comparable GAAP measures in our earnings release. Before I pass the call over to Peter, I would like to remind everyone that due to the announcement on March 8th, 2021 regarding the signing of the definitive agreement to sell the enterprise business, the financial results of the enterprise business were classified as discontinued operations in our condensed consolidated financial statements and are thus excluded from continuing operations for all periods presented. As such, we will focus on continuing operations or our consumer business on this and future calls. I will now turn the call over to Peter Leaf, McAfee's President and CEO.

Thank you, Eduardo, and good afternoon. Before we move to our quarterly results, we are very pleased to highlight that on July 27th, we completed the sale of our enterprise business for $4 billion in cash. This was a major accomplishment, and I want to take a moment to thank the team for working diligently over the past several months to make this happen. As we look forward, we are excited about our journey as a pure-play consumer cybersecurity company. Now to our quarterly results. Q2 was another strong quarter for McAfee as we significantly increased revenue, profitability, and free cash flow. We drove very strong performance during the first half of the year with double-digit year-over-year growth for both revenue and adjusted EBITDA. As a result, we are increasing our FY21 guidance. In Q2, we delivered revenue of $467 million, an increase of 22% year over year as compared to the same period last year. Adjusted EBITDA for the quarter was $218 million, up 38% versus the same period last year, representing a margin of 47%. The adjusted EBITDA for the period included stranded costs of $21 million. We continue to drive double-digit growth along with improved profitability through our differentiated product and omni-channel go-to-market strategy. Consumers are increasingly adopting our powerful online protection services. In Q2, we added organically another industry-leading 556,000 net new core direct-to-consumer subscribers, or DTC, to our platforms. closing the quarter at a cumulative 19.4 million versus 16.6 million core DTC subscribers in the same period last year. This marks our 15th consecutive quarter of sequential and year-over-year core direct-to-consumer subscriber ads. In addition to these strong operating results, Q2 highlights included signing a multi-year extended agreement to McAfee's longstanding partnership with Samsung, to protect Samsung PC users' personal data against online threats worldwide via our McAfee LiveSafe product. Our unique omni-channel go-to-market strategy continues to allow McAfee to outpace the competition, attracting subscribers at the emanation point and throughout their digital journey. Furthermore, from a product perspective, on May 31st, the German anti-malware test lab, AV-Test, awarded McAfee's total protection top product certification for the sixth consecutive time. Additionally, on June 21st, AV-Test also awarded McAfee's mobile security for Android a perfect score for the seventh consecutive time. We continue to execute on our plan as we strike the right balance between investing to grow and capture the tremendous market opportunity in front of us while improving margins. We remain committed to invest in our product portfolio, go-to-market engine, and subscriber acquisition and retention motions and plan to continue to drive double-digit revenue growth over the long term. We are confident in the sustainability of this trajectory and driven by the positive market forces tied to the proliferation of personal devices and data, educational, social, and professional use adoption, the evolving threat landscape, as well as increased public awareness of the importance of privacy, identity protection, and security. As we look out over the second half of the year, we are confident that the flywheel effect of our business will continue to benefit from a greater renewal base associated with the trailing 12-month cohort of 2.8 million net new DTC subscribers added as of the end of Q2. We understand the mission-critical role that we play in securing consumers' digital lives around the world. The acceleration in digitization that has taken place over the past year has only served to compound that urgency. McAfee's expertise in bringing differentiated security solutions to consumers has never been more timely. New conveniences in the realm of work, learn, shop, bank, exercise, and stream have gone from nice-to-haves to must-haves. These digitally enabled experiences have become permanently woven into consumers' daily lives, and they expect every interaction to be secure. McAfee is there to provide that peace of mind. Thank you once again to our McAfee team for your dedication and hard work, which has allowed us to focus on customer and partner success, execute on our strategy, and deliver very strong Q2 results. I will now turn the call over to Venkat to discuss our financial results in further detail.