It’s been a busy 24 hours for Symantec, which has announced a profit warning, a new CFO appointment, and the resignation, effectively immediately, of CEO Greg Clark.
According to Symantec, the company ‘will commence’ a search for a permanent replacement. In the meantime, current Symantec director Richard Hill (formerly Chairman and CEO of Novellus Systems) has been appointed Interim President and Chief Executive Officer.
“It has been a privilege to lead this great organization and I am proud of all that the team has accomplished in nearly three years,” Clark said. “Together, we’ve built a large installed base of customers and brought to market some of the world’s most powerful cyber defense solutions. As Symantec enters its next phase of growth and value creation, it is the right time for the Board to identify the next generation of leadership. With Rick as Interim President and CEO and a world class team in place, I have no doubt this will be a seamless transition for our customers, partners, employees and shareholders.”
As Symantec enters its next phase of growth and value creation, it is the right time for the Board to identify the next generation of leadership.Greg Clark, former CEO and President, Symantec
On a call with analysts, Hill said that Clark indicated in April that he had “personal issues” to attend to. However, “someone close to the situation” told the Financial Times that the departure was related to Symantec’s financial performance.
That’s not hard to believe, looking at the results for the fiscal fourth quarter and full 2019 results, which Symantec also reported yesterday. Fiscal fourth-quarter sales came to $1.19 billion: down from $1.21 billion the year before, and below analysts’ estimates of $1.21 billion. For the year, net income was $31 million, down from $1.1 billion reported in the previous year.
Symantec has also warned that it expects first-quarter profit of between 30 cents and 34 cents per share – again, below the expected 40 cents per share.
That’s on top of the existing turbulence the company is facing. The US SEC is currently carrying out a formal investigation into some possible issues with its accounting, and last year Clark announced that layoffs of up to 8% were planned.
Stocks fell by as much as 15% following yesterday’s announcements.
“As we enter into a new financial year, Greg and the Board agreed that now is the right time to transition leadership, and we are confident in Rick’s ability to drive the Company forward while we work to identify a permanent CEO,” said. Daniel H. Schulman, Chairman of Symantec’s board of directors.
“The Board extends its deep appreciation to Greg for his leadership and contributions to our Company since becoming CEO. He has led Symantec through a time of great transformation, including the combination with Blue Coat and the acquisition of LifeLock, which redefined the cybersecurity landscape. We wish him all the best in his future endeavors.”
In Symantec’s statement regarding its financials, Hill attributed the miss on earnings to disappointing enterprise sales.
“Our Consumer Cyber Safety segment continued to deliver solid results, and we were pleased with increases in average revenue per user, both year-over-year and sequentially,” said Hill. “However, our Enterprise Security revenue was below our guidance range due to lower than expected bookings, which led to year-over-year reported billings declining greater than we anticipated.”
Hill has served as Director for a considerable number of tech companies, and in addition to his time as CEO of Novellus, has stepped in as Interim CEO for both Tessera Holding and Marvell Technology. He’s been a Director at Symantec since January 2019.
“I’d like to thank Greg Clark and the full team at Symantec, who have done an outstanding job of building a strategy and solutions that defend enterprises and consumers from the ever increasing cyber threat landscape,” he said.
“I look forward to working closely with the Board and management team in executing on the market opportunity within cyber security and am proud to lead Symantec during this interim time while we transition to permanent leadership in the Company.”
Clark had been CEO since 2016, when he took the role following the equally sudden departure of his predecessor Mike Brown. He, Nicolas Noviello and Michael Fey joined the company as part of its acquisition of Blue Coat Systems, where they were respectively CEO, CFO and COO, the same roles they held at Symantec.
Having met Rick three years ago, I continue to be impressed by his focus on operational excellence and strong record of execution. I am very pleased to be joining him and the entire team as we work to enhance our financial and operational discipline, and improve our results and margins.Vincent Pilette, incoming CFO, Symantec
Fey resigned from Symantec with immediate effect last November, and was replaced by current COO Art Gilliland, who was previously Symantec’s GM of Enterprise Products. Noviello’s departure from Symantec was announced in January, though he was to stay on until the appointment of a replacement. The company has now found that replacement in Vincent Pilette, whose previous roles include CFO at Logitech and VP of Finance at Hewlett Packard Enterprise, and who will be taking over as CFO on May 21.
“I join Symantec with a deep background in operations and as an investor in the Company. Symantec is known for its R&D strengths, its iconic brands, and the breadth of its portfolio, and I am eager to work with the management team to drive growth across our Enterprise and Consumer segments and deliver value to our customers, partners and shareholders,” said Pilette.
“Having met Rick three years ago, I continue to be impressed by his focus on operational excellence and strong record of execution. I am very pleased to be joining him and the entire team as we work to enhance our financial and operational discipline, and improve our results and margins.”