McAfee Reports Strong Q2, Mobile Security Buy

Today, we announced our second quarter 2010 results to Wall Street and our intent to acquire privately owned tenCube, the provider of the WaveSecure mobile security service.

I see several major themes that I want to outline today as part of understanding McAfee, our market and our second quarter results:

• The market we address is expanding rapidly, as the number of devices connected to the Internet is exploding and the threat landscape continues to evolve and worsen
• As a pure play digital security provider, we have the right strategy and we absolutely have the right product portfolio to meet market needs today. More importantly, we are continuing to gain competitive advantage by developing and acquiring the right technologies for where the market is headed.
• In particular this quarter, we had the challenge of turning an adverse event – namely a false positive incident– into an advantage by working closely with our customers to resolve the issue quickly and effectively. The result – we’ve put this issue behind us, our customer base is larger and stronger than ever.
• As a result of this opportunity and vision we have achieved strong results over the last few years and our business did very well in Q2 on multiple levels.
• I am very excited about the global business opportunities in security, our vision of securing digital assets from silicon to satellite, and our strong results over the last few years.   When you add in our strong and growing partnerships and customer relationships, McAfee’s future is very bright.

Financial highlights for the quarter include revenue of $495 million, an increase of 6 percent year-over-year, cash flow from operations of $134 million, an increase of 152 percent year-over-year, and earnings per diluted share of $0.63, a second quarter record representing an increase of five percent year-over-year.

In our Corporate Business, revenue grew five percent year-over-year to $305 million in the second quarter of 2010.  McAfee closed 474 deals greater than $100,000 in value, including 78 deals greater than $500,000 in value and 30 deals greater than $1 million.

I am especially pleased with our record consumer business performance in Q2, which reached $191 million for the quarter and has been an area of strategic investment for us.

The strength of our security solutions continues to drive stronger customer relationships and partner alliances. Our products continue to ship on over 50% of the consumer shipments on the top 10 PC OEM shipments – an enviable position and one I am quite proud of. 

We see a huge opportunity in the mobile device market, which has lead us to the acquisitions of tenCube and Trust Digital. We’re at a tipping point and well poised to lead this market. There will be 50 billion IP connected devices in 2020, up from 1 billion today. With the proliferation of these devices comes the need to secure and manage them—whether it’s the value of the device itself, protection from theft and data loss, or meeting compliance requirements set forth by the user’s employer. With our more than 20 years of expertise in securing the endpoint, nearly a decade of experience securing mobile devices and a vast partner ecosystem, we are well set to out innovate our competitors and deliver the broadest mobile platform available.

Adding WaveSecure’s locate, lock, back-up and wipe technology to Trust Digital’s enterprise mobility management and McAfee’s mobile security technology, gives McAfee the capabilities it needs to deliver the industry’s most complete next generation mobility platform. McAfee will now have a single platform, from the consumer to the enterprise, to address the management and security of all devices types, to all markets and with the most robust feature set.

I am very optimistic about our future.  Look for more exciting partnership and product announcements at FOCUS 2010 in October, our third annual user conference.  We continue to build the foundation to drive our growth with industry leading solutions, a world class workforce, and the strongest partner relationships in our history.

Dave

Tags: earnings, M&A, Mobile, partners