Good afternoon, everyone. Thank you for standing by. My name is Jerome, and I will be your conference Operator today. I would like to welcome everyone to that NortonLifeLock Fiscal 2022 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 speakers’ remarks, there will be a question-and-answer session. At this time, for opening remarks, I will now like to pass the call over to Ms. Mary Lai, Head of Investor Relations. Miss, you may begin.

Thank you, Darrell and good afternoon, everyone. Welcome to NortonLifeLock fiscal 2022 Second Quarter earnings call. Joining me today to review our Q2 results are Vincent Pilette, CEO and Nally Jersey CFO. As a reminder, there will be a replay of this call posted on the IR website along with our earnings slides, press release, and 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-GAAP to GAAP measures is included in our Press release, which is available on the IR website at investor. nortonlifelock.com. In addition, we previously announced the merger of NortonLifeLock and Avast. The information shared today will be limited to what has already been disclosed in the document published on our website in connection with the deal. 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 uncertainties that may cause actual results to differ materially from our current expectations. Those statements are based on our 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 2nd, 2021. And now I will turn the call over to our CEO. Vincent.

Thank you, Mary. Welcome and good afternoon, everyone. We've come a long way since we became a consumer focused, standalone Company exactly 2 years ago today. As I reflect on NortonLifeLock's transformation, I'm extremely proud of our team. We committed to operating within financial discipline and bringing meaningful and sustainable growth to this business and we have delivered. We have relentlessly been building a strong track record and remain focused on meeting our long-term objectives. As you've heard me share before, we are focused on driving growth by improving customer experience, scaling our integrated cyber safety platform, and accelerating the base of our product innovation from core security to trust-based digital solutions. By putting our customers first and relentlessly executing to our plan, we believe our long-term goals are within reach. Our strategy is working, and as we delivered another quarter of solid and consistent growth, Q2 revenue was up 11% with high single-digit growth in bookings. We are delivering strong profitability and continued EPS expansion, up almost 20% year-over-year. Our high single-digit bookings growth was in line to our long-term objectives and is reflective of our normal seasonality, with the first half of our fiscal year historically being seasonally lower. The start of Q2 was impacted by expected weaker summer demand and COVID reopening as more people mobilized or prioritized to travel and other activities. As we balanced all of our operational metrics and investment, we finished the quarter with strong momentum, delivering our 8th straight quarter of net direct customer adds sequentially. Our direct customer count grew over 178,000 sequentially and we added over 2.6 million customers year-over-year, bringing our total customer count to 23.3 million. In Q2, our direct-to-consumer revenue, which represented the majority of our business, was up 9% with ARPU growing slightly quarter-over-quarter, and new…

Thank you, Vincent. And hello, everyone. To all our customers, shareholders, and listeners around the world who are celebrating Diwali today, may the festival of lights bring joy and happiness to you and your families. For today's discussion, I will focus on non-GAAP financials, starting with our Q2 results and then provide our outlook for Q3 in full-year. We delivered another solid quarter, rounding out a strong first half of our fiscal year. Our Q2 revenue was $695 million, up 11%. Our growth remains broad-based across GOs and products. Booking’s growth of 7% was supported by our renewal efforts, expanded product offerings, and continued international expansion. Our total direct customer account increased to 23.3 million, adding 2.6 million customers year-over-year and adding 178,000 net new customers quarter-over-quarter. This was our eighth consecutive quarter of sequential net direct customer adds. In a quarter where there is seasonally lower demand, our strong net adds in Q2 is evidenced that there is growing demand for our products. And we feel proud to have added over 300,000 net new customers in the first half of our fiscal year. Our operational metrics remained strong with 85%-unit retention. And our monthly average revenue per user or ARPU, increased on a sequential basis to $8.85. As a result, our direct business maintained consistent growth momentum up 9% in revenue. We continue to drive higher engagement with our existing loyal customers through the accelerated pace of new product releases while scaling up our cross-sell efforts. We're also reaching more audiences with the expansion of our identity protection offerings into more international markets, providing broader cyber safety protection to newer cohorts of customers. As Vincent mentioned earlier, our partner business again posted strong results in Q2, up 25% year-over-year, with continued strength in employee benefits, as well as growth…

We expect Q3 non-GAAP revenue in the range of $695 million to $705 million, assuming stable currency rates quarter-over-quarter, which translates to 9% to 11% growth year-over-year. We expect Q3 non-GAAP EPS to be in the range of $0.42 to $0.44 per share. For the full-year, we expect non-GAAP revenue growth of 9% to 10% year-over-year in constant currency and non-GAAP EPS in the range of $1.70 to $1.75, narrowing the range to the high end on both revenue and EPS versus what we shared with you back in May at our Analyst Day.

We look forward to building on our growth momentum and consistent profitability in the second half of this year. And we are well-positioned to deliver on our objectives. Even with the macro impacts around inflation, foreign exchange rate fluctuations, and the evolving pandemic conditions, we have successfully navigated through and continue to hit expectations. As we look forward, we will continue to challenge ourselves to anticipate, prioritize, and meet customer needs in a growth focus manage -- manner. Thank you for your time today and I will now turn the call back to the Operator to take your questions. Please, do keep in mind we are not able to answer any questions related to any specific M&A at this time. Operator.

Thank you. At this time, I would like to remind everyone in order to ask a question, [Operator Instructions]. Your first question comes from the line Saket Kalia from Barclays, your line is open.

Good afternoon.

Hey Vincent. Hey, good afternoon, Vincent, hey, Natalie, thanks for taking my questions here.

Yeah.

Natalie, maybe just to start with you, I was wondering if you could just double-click a little bit into the billing’s metric. I think we heard 7% growth in bookings, which is really good to hear. I think the billings growth is a little bit lower than that -- I come to about 5%. Can you just walk through maybe some of the puts and takes there? I know that maybe there was a slightly tougher compare, you know, there's always currency mean just maybe you could just touch on that growth kind of compared to bookings, kind of compared to billings growth in prior quarters.

Sure. Thanks, Saket. Look, I'm not surprised at the question around 7% bookings, I am going to focus on bookings in the response to your question. But I'm also not surprised that our Q2 results as it's in line with our models, our internal models. As you know, we don't guide bookings, but we did share that Q2 is historically, a seasonally lighter quarter. We also recognized early on that even if you look at the external search traffic metrics, either on Google metrics, analytics, etc., and you hone in on our branded and non-branded terms, we knew that search volume was lower than prior quarters in what we saw last year. And then we also saw very early on that the advertising spend being put into the market across our competitive landscape was up. The other thing I'd encourage you guys to look at is, as you know, with our recurring business model and as you know, with customer acquisition, when they get to the first-year retention and the renewal, there's a healthy step-up in terms of the bookings amount that we get as those as those customers choose to renew with us. So, you really have to date back to last year in Q1, we added 379,000 net new customers. Again, factor in the seasonality component from Q1 to Q2 last year at this time, we added about 117,000 net customers. When you factor into the model, the step-up in the renewal bookings that we get from that renewable customer base, it would point you to a 7% result for us.

If I can add, just a few step backs. Like at quarter-in, quarter-out, obviously, we represent bookings, so investor can understand the underlying metrics, but revenue and bookings trend about the same way. Not every quarter, but on a multi-quarter trend, and we guided revenue for next quarter 9% to 11%. Again, we don't guide bookings but we see this trending somewhat in that range.

Got it. Got it. That's very helpful. Vincent, maybe for my follow-up for you, a lot of good things happening internationally. Can you just remind us how big is international currently as a percentage of the business? And what's -- I guess, how big can you see international long-term as a percentage of total? And is that more of an antivirus type of market? Is that more of an identity monitoring market? Is it a little bit of both? Curious how you see international longer-term.

It's a good question, Saket. I'll give you the short Belgium answer. International is not big enough. It indeed represents about 30% of our business. As you know, we acquired Avila to accelerate our growth internationally. As you said, lot of good efforts. Initially our offering in those outside-of-the - U.S. countries did not include identity elements. We now start to build up the portfolio to move above and beyond that security, moving into protecting the digitalize, exploring element of restoration, and so, what I call solutions, which includes our services. I think on the long-term perspective, outside of the U.S. the huge structural growth opportunities. Obviously, the proposed merger with Avast will boost all of that, they will be more balanced. When I look at different industry, technology, or even the demographic, as you know we should be more 40 in the U.S. 60 international versus the reverse on the unit basis and we're going to continue to expand.

Very helpful. Thanks, guys.

Thank you.

Thank you. [ Operator's Instructions] Your next question comes from the line of Q - Hamza Fodderwala from Morgan Stanley. Your line is now open.

Hey, good evening, guys. Thanks for taking my questions.

Sure.

I'll keep it to one question. Natalie, since you alluded to inflation, I'm curious what NortonLifeLock is thinking about in terms of pricing on renewal, particularly into the next fiscal year. Thank you.

If you don't mind, I'll take it and I'll step back a little bit in a broader context. First, as you know, we've acquired Avira. Our number 1 objective is to scale our cyber safety platform. And you're going to see us coming to invest into the freemium model, expanding the freemium model to above security, expanding to other countries. And that's our first point of entry. We would love that the 5 billion Internet users are all fully consciously protected from cyber criminality. When it comes to then our ongoing prices, obviously, pricing, structure, and how do you up-set and move to a premium model, have different structure. First, your price, as you know, as a promotion to get in, the first time you get in, and then you have the renewal price at the normal MSRP that we have set. And then with tracking, the dynamic of cost, inflation, competition in every country. It is a dynamic environment. It is a competitive environment, and so our pricing philosophy follows the value we provide to the members as we continue to add new product and new value to that membership, then customers up to higher level of membership. And that is the whole business model the way I'm describing it.

Thank you.

Thank you. [Operator Instructions]. At this time there are no more questions. I will turn the call back to Vincent Pilette, CEO for closing remarks.

Why don't we wait to 1 minute to see if there's nobody last time there was no more question, we had 2 minutes later plenty of question trying to get in, so let's check 1 more time Operator. If you don't mind.

Sure. [Operator Instructions].

Okay. We, obviously, are always as management very open and available for any questions our investors otherwise would have. We'll have plenty of one-on-one sessions between now and the next few days. I do want to thank our shareholders that have overwhelmingly approved the issuance of shares for the acquisition or the merger with Avast. We see that as a vote of confidence, confidence into our strategy, confidence into the specific transaction, confidence into the board and management. Thank you, everyone. And we'll be connecting very soon.

Thank you. This concludes the conference call. You may now disconnect. Thank you.