Mcafee Corp. (MCFE) SEC Filing 10-Q Quarterly report for the period ending Saturday, September 26, 2020

Exhibit 99.1

McAfee Reports Third Quarter and Nine Month 2020 Results

SAN JOSE – November 19, 2020 – McAfee Corp. (“McAfee,” or the “Company”) (NASDAQ: MCFE), the device-to-cloud cybersecurity company, today announced its financial results for the three and nine months ended September 26, 2020.

“We delivered strong third quarter results led by Consumer revenue growth of 23 percent year-over-year, expanding profitability, and strong cash flow generation which is a testament to our team’s execution. Through more than 30 years of leadership and innovation we have built a trusted global cybersecurity brand by seamlessly securing a consumer’s digital experience and defending many of the world’s largest organizations from sophisticated attacks and nation-state threats. The cybersecurity landscape has never been more intense and the need for our solutions is as important as ever. We are very excited to embark on this next leg of our journey as a public company,” said Peter Leav, McAfee’s President and Chief Executive Officer.

Financial Highlights for the Third Quarter of 2020 Compared to Prior Year Quarter

Revenue: Total net revenue for the quarter was $728 million, up 10 percent year-over-year. Consumer revenue was $395 million, reflecting 23 percent growth. Enterprise revenue for the quarter was $333 million, with the percentage of revenue from core Enterprise customers remaining above 80 percent of total Enterprise revenue.

Net Income: McAfee reported breakeven net income for the quarter.

Operating Income: Total operating income for the quarter was $128 million, reflecting 142 percent growth. Operating income margins more than doubled to 17.6 percent. Operating income for Consumer was $106 million, reflecting 49 percent growth. Operating income for Enterprise was $22 million, an increase of $40 million from the prior year period.

Adjusted EBITDA: Total adjusted EBITDA for the quarter was $265 million, reflecting 26 percent growth. Adjusted EBITDA margins expanded by 470 basis points to 36.4 percent. Adjusted EBITDA for Consumer was $181 million, reflecting 26 percent growth. Adjusted EBITDA for Enterprise was $84 million, reflecting 27 percent growth. Adjusted EBITDA margin for Enterprise also saw significant year over year improvement, coming in at 25.2 percent compared to 19.4 percent in the comparable period.

Unlevered Free Cash Flow: Net cash provided by operating activities was $464 million in the nine months ended September 26, 2020 compared to $285 million in the nine months ended September 28, 2019. Unlevered Free Cash Flow was $639 million for the nine months ended September 26, 2020 compared to $454 million for the nine months ended September 28, 2019.

Consumer KPIs: The market leading growth in McAfee’s Consumer business is attributable to solid business fundamentals, led by 16 percent year-over-year subscriber growth in Core DTC subscribers. McAfee ended the third quarter with 17.3 million Core DTC subscribers, adding over 2.4 million net new subscribers compared to the third quarter of 2019 and 669,000 net new subscribers during the past quarter alone. Consumer trailing twelve-month dollar retention rate was 100 percent for the third quarter, versus 96 percent in the comparable period last year. This marks the 12th consecutive quarter of positive quarter over quarter and year over year Core DTC subscriber growth.

Please refer to the section titled “Use of Non-GAAP Financial Information” and the tables within this press release which contain explanations and reconciliations of the Company’s non-GAAP financial measures.