Symantec 2016 Annual Report Download - page 98

recently, the divestiture of Veritas. Transitions of the magnitude we have experienced and are experiencing can
be disruptive, result in loss of institutional focus and employee morale and make the execution of business
strategies more difficult. We are also focused on addressing dynamic and accelerating market trends, such as the
continued decline in the PC market, the market shifts towards mobility, the transition towards cloud-based
solutions and architectural shifts in the provision of security, all of which has made it more difficult for us to
compete effectively and requires us to improve our product and service offerings. We may experience delays in
the anticipated timing of activities related to our efforts to address these challenges and higher than expected or
unanticipated execution costs. In addition, we are vulnerable to increased risks associated with these efforts and
the broad range of geographic regions in which we and our customers and partners operate. If we do not succeed
in these efforts, or if these efforts are more costly or time-consuming than expected, our business and results of
operations may be adversely affected, which could limit our ability to invest in and grow our business.
We may not achieve the intended benefits of the divestiture of Veritas.
On January 29, 2016, we completed the divestiture of Veritas, however, we may not realize some or all of the
anticipated benefits from the transaction. The resource constraints as a result of our prior focus on completing the
transaction which included the loss of employees could have a continuing impact on the execution of our
business strategy and our overall operating results. Additionally, in connection with the divestiture, our Board of
Directors committed to returning the proceeds of the sale of Veritas to stockholders in the form of a capital return
program, which included the payment of a special dividend in March 2016, entry into multiple share accelerated
transactions, and continued repurchases under current and future share repurchase programs. The use of proceeds
in this manner could impair the Company’s future financial growth.
Fluctuations in demand for our products and services are driven by many factors, and a decrease in demand
for our products could adversely affect our financial results.
We are subject to fluctuations in demand for our products and services due to a variety of factors, including
market transitions, general economic conditions, competition, product obsolescence, technological change, shifts
in buying patterns, financial difficulties and budget constraints of our current and potential customers, awareness
of security threats to IT systems and other factors. While such factors may, in some periods, increase product
sales, fluctuations in demand can also negatively impact our product sales. If demand for our products and
solutions declines, whether due to general economic conditions or a shift in buying patterns, our revenues and
margins would likely be adversely affected.
Our business depends on customers renewing their arrangements for maintenance, subscriptions, managed
security services and SaaS offerings.
A large portion of our revenue is derived from arrangements for maintenance, subscriptions, managed security
services and SaaS offerings, yet existing customers have no contractual obligation to purchase additional
solutions after the initial subscription or contract period. Our customers’ renewal rates may decline or fluctuate
as a result of a number of factors, including their level of satisfaction with our solutions or our customer support,
customer budgets and the pricing of our solutions compared with the solutions offered by our competitors, any of
which may cause our revenue to grow more slowly than expected, if at all. Accordingly, we must invest
significant time and resources in providing ongoing value to our customers. If these efforts fail, or if our
customers do not renew for other reasons, or if they renew on terms less favorable to us, our revenue may decline
and our business will suffer.
Any cost reduction initiatives that we undertake may not deliver the results we expect, and these actions may
adversely affect our business.
In May 2016 we announced a fiscal 2017 restructuring plan to be achieved by the end of fiscal 2018. This
initiative could result in disruptions to our operations. Any cost-cutting measures could also negatively impact
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