McAfee Inc. reported fourth quarter 2009 revenue of $525.7 million, up 24.0% year over year and 8.0% sequentially. Good execution and robust demand for security solutions helped McAfee achieve the sixteenth consecutive quarter of double-digit YOY revenue growth.
The company reported increase in revenue across all its segments. The Corporate Business segment reported fourth quarter revenue of $388.0 million, up 30.0% year over year. In this segment, the company closed 623 deals, greater than $100,000 in value, including 103 deals greater than $500,000 in value and 33 deals summing up to more than $1.0 million in value.
The Consumer Business reported revenue of $188.0 million, up 15.0% YOY. In this segment the company signed or extended 34 agreements and launched 63 new online partnerships, bringing the total to over 200 brand name partners globally.
The North America segment reported revenue of $299.0 million, up 28.0% YOY. The International segment reported revenue of $227.0 million, up 19.0% year over year.
Within International, Europe, Middle East and Africa (EMEA) grew 24.0%, Asia Pacific 6.0%, Japan 10.0% and Latin America 20.0%. Currency fluctuation positively impacted revenue by $23.0 million on a YOY basis, but positively impacted revenue by $9.0 million on a sequential basis.
Fourth quarter GAAP gross profit was $394.3 million, up 23.7% on a YOY basis. Excluding special items non-GAAP gross profit for the quarter was $416.7 million, up 24.0% on a year over year basis. This resulted in a gross margin of 75.0% in the current quarter, compared to 75.0% in the year-ago quarter. The increase in gross margin can be attributed to scale up in business activity and integration of hardware-centric IT security systems.
Operating income on a GAAP basis was $72.2 million, up 121.5% on a YOY basis. Excluding special items, non-GAAP operating income for the quarter was $136.7 million, up 27.4% on a year-over-year basis. This resulted in an operating margin of 13.7% in the current quarter, compared to 7.7% in the year-ago quarter.
GAAP net income for the quarter was $54.5 million or $0.34 per share, up from $45.4 million or $0.29 per share reported in the year-ago quarter. Excluding special items like stock based compensation, amortization, restructuring charges, legal settlement charges and others, non-GAAP net income was $102.9 million or $0.64 per share, up from $82.5 million or $0.53 per share in the year-ago quarter.
Balance Sheet & Cash Flow
During the recently concluded quarter, the company generated around $145.0 million in cash flow from operations. Days sales outstanding (DSOs) were 50 days. At the end of the fourth quarter, the company reported cash and marketable securities of $950.2 million, up from $593.7 million reported in the previous quarter.
Deferred revenue at the end of the fourth quarter of 2009 was $1.41 billion, up 9% YOY. During the fourth quarter, the Board of Directors approved a stock repurchase program of up to $500 million till Dec 2011.
Management expects first quarter 2010 revenue in the range of $500.0 to $520.0 million. First quarter 2010 GAAP net income is expected to be in the range of 30 cents to 36 cents per diluted share and non-GAAP net income in the range of 60 cents to 64 cents per diluted share.
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