Symantec 2010 Annual Report Download - page 3

DEAR FELLOW STOCKHOLDERS,
During fiscal 2010, businesses and consumers alike tightened their IT
budgets, looked to extract more value from current resources, and were
forced to do more with less. This worldwide reduction in IT spending, as
you can imagine, impacted both our enterprise and consumer businesses.
However, some measure of stabilization in the marketplace and improved
execution by the Symantec team generated solid financial results during the
second half of our fiscal year. Our consumer business grew each quarter
throughout the year despite the impact of the global economy — a
testament to the strength of our Norton franchise and our superior security
and backup solutions. While we expect the global recovery to be gradual,
we are committed to building on the momentum we have recently built.
Throughout the year, we took a disciplined approach to creating high quality, integrated
solutions in order to solve customers’ complex problems. The consumer and enterprise products
we offer are more capable and valuable to our customers than ever. The integration of our storage
and security technologies allows us to create unique offerings that meet the needs of customers in
ways that our competition cannot match. During the past year, we also improved the way we
manage customer accounts, review sales opportunities, and allocate resources to enhance sales
productivity. As a result, revenue tied to cross-selling and up-selling our product portfolio has
increased. I believe that the advances we made in fiscal 2010 have set us up for a successful fiscal
2011.
FINANCIAL RESULTS
During fiscal 2010, revenue declined 3% to $6.0 billion, generating non-GAAP
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earnings per
share of $1.49. We finished the year with deferred revenue of $3.2 billion, an increase of 5%,
indicative of our positive momentum and stabilization in our markets. We generated cash flow
from operating activities of $1.7 billion, a portion of which was used to repurchase 34 million of
our shares for $553 million. During the year, the board authorized a new $1 billion share
repurchase program and we exited the year with $747 million remaining in the program. We
remain committed to returning value to shareholders through stock buybacks.
FISCAL 2010 ACCOMPLISHMENTS
When I assumed the role of President and CEO in April 2009, I outlined a clear set of
priorities for our executive team. As I look back over the year, I am proud of what we have
accomplished.
We strengthened our leadership in security. Our Norton 2010 consumer products, released in
September 2009, are receiving numerous accolades around the world, with more than 130 awards
to date. Our new, internally developed reputation based security technology is one of many
contributors to the success we are experiencing in our consumer business. This revolutionary
capability leverages data from millions of participating Norton users to warn customers of
dangerous files or programs before they are downloaded. Delivering high quality products
enhanced our ability to attract and retain more consumers. We now have more than 135 million
consumers using our products — an increase of 13% year over year. We improved our customer
retention rate by 30% boosting the average life of a Norton customer to more than four years. We
expanded product distribution through our multi-channel strategy. Our products are shipping on
60% of global consumer Windows-based PC’s. We increased the number of ISP’s we work with by
33% and we realized growth in retail bookings despite a challenging macroeconomic backdrop. We
also launched a new in-house eCommerce platform to enhance customers’ end-to-end experience
and capitalize on emerging market trends.
During the past year, we enhanced our focus on suites, rather than point products, across our
enterprise security portfolio. This is making it easier for our customers to benefit from a range of
our security technologies in an integrated and straightforward way. As a result, we are capturing
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Non-GAAP results are reconciled to GAAP results on page 5.