Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| And finally, that scale has enabled us to build what I think is the best service team in cyber safety for consumers |
| Every cohort, every channel is managed in a positive economic view |
| And in fact, this work has already resulted in some very good outcomes |
| Best-in-class operating income |
| And now we are getting to the crux of why I am so incredibly excited about Gen and the opportunity ahead of us |
| And today, you'll hear from Ondrej, from Nathalie, we feel really well positioned to drive the next generation of cyber safety, embarking on that great journey |
| And we, if you saw in our press release today, have returned to net positive customer count growth this quarter, averaging over the last 4 years of low single-digit rate of growth |
| And hopefully, you got a good feel for all of the diversity of levers and reach and growth and retention that we can operationally drive inside our company |
| I know that it's important for some of you to understand that it's not just me or Natalie, sometimes you see Ondrej, but we have a very strong team |
| We started growing the customer base early on and continued adding net new customers for 10 straight quarters in a very healthy way, holding our already high retention rates stable even through the elevated new acquisition levels through COVID, bringing the total count of customers from 20 million in 2020 and to 24 million as we ended the year as Norton LifeLock in fiscal year '22 |
| We are driving operating margin expansion |
| And our earning power strengthened |
| And our reach is expanding, and we have tremendous opportunities ahead |
| If you step back though, since 2019 all the way to now -- excluding the post COVID [indiscernible] of 5 quarters, we've been steadily also low growth, but steadily growing our customer count improving on what you just heard today |
| As we expand further, we're going to leverage our strong brand reputation our vast products and services and our diverse go-to-market infrastructure to drive more reach |
| But all of the strengths in terms of retention and putting all the capabilities in acquisition together has enabled us to return to customer count growth |
| We've taken the top down by $50 million, but we've raised the bottom by EUR 10 million, reflecting the very strong quarter we've delivered |
| And our track record in doing so has been very, very strong |
| We have a strong execution track record |
| Our business is incredibly healthy |
| We generate very strong free cash flow and it's scaling significantly |
| And as we continue to scale, we create capacity that affords us the ability to reduce the level of debt outstanding through accelerated debt payments like we've already done 4 times this year |
| We offer best-in-class protection in all facets of our customers' digital lives |
| And we expect that to increase as EBITDA grows in line with revenue, given that we've already achieved the majority of our cost synergies and expanded operating margin |
| Our partnership model offers us not only expanded customer reach, it's an incredibly strong revenue stream for us, and we grow with our partners |
| So you could expect the numbers are a little bit better than we expected |
| So good progress on retention, which is number 1 metric in that customer metric |
| But before I talk about acquisition, retention is probably the most important because high retention means that the customers are satisfied by the product they buy and they pay for -- and you've seen the fantastic progress we've had |
| As we scale our reach and grow with our customers and retain those customers, we gain operating leverage, and we expect to capture high margin dollars from the new volume |
| It's important to reach as many new users as we can, and we do that with an omnichannel approach, taking forward our strong brand recognition and our proven track record of trusted services |
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| And then on your guidance, you lowered your guidance a little bit, I think it was $0.20 and you quoted macro factors that also implies some kind of cyclicality |
| So I'll repeat the question is I don't know if you have a microphone says, but when PC goes down, the installed base doesn't go down, but you'll be under pressure and over time, the PC may go down and referred to, we've had 5 quarters of sequential customer count down |
| During the same time, global business dynamics change that created notable macro headwinds, we can all relate especially for us, the significant increase in interest rates that have remained elevated for longer than we expected |
| Macro level is still challenging |
| Yes, it's a difficult macroeconomic environment |
| But we have also some headwinds, whether it's a consumer that does not -- who is not aware of the risk or simply is willing to take the risks or is freezing in front of the technology that can create that risk or feels that the tools are not easy to use |
| As I look back when we stood up Norton LifeLock, as a stand-alone direct-to-consumer business, we set challenging goals and delivered big, big results |
| And when PC is done, it's not done at the rate of the PC, but of course, it's under pressure by the macro event |
| When we first stood up Norton LifeLock as a stand-alone company, we challenged ourselves to return the customer count to net positive growth after years and years of decline |
| Business is being attacked |
| And it's bigger, it's fiercer and it's more damaging than anything that we have seen before |
| We're not any more attached to the PC shipment, which is another indirect question I get all the time, which is, hey, PC is down 20% |
| Some days it was painful |
| On the other hand, people are increasingly worried about the risks that are associated with all of that |
| And you've seen here now acquisition back to growth despite the fact that we're not immune, but there is a macro level environment that's not the most optimistic |
| And those worries, those cyber security or cyber safety worries have only become larger post COVID |
| It is expected that by 2026, up to 90% of all content on the Internet will be AI generated, which will obviously have massive consequences in terms of how content is consumed and data, including personal data is trusted and we are getting credit for that in our portfolio |
| Number one, increasing intensity of cyber attacks now excavated by AI makes cyber safety a real vital industry whose size and importance will only continue to grow |
| And therefore, if I send more people leaving and yet in a post COVID, the acquisition was a little bit more depressed and couldn't offset |
| AI-powered password cracking and credential theft |
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