Symantec CEO Greg Clark abruptly resigned yesterday immediately before the embattled security company reported its fourth-quarter 2019 earnings, which included weak enterprise sales and disappointing forecasts for the first quarter and full 2020 fiscal year.
The company appointed Richard Hill, current Symantec director and former chairman and CEO of Novellus Systems, as interim president and CEO, effective immediately, and said it will begin a search to find a permanent CEO.
Additionally, the company hired Vincent Pilette, CFO of Logitech and former VP of finance for Hewlett Packard Enterprise (HPE)’s server, storage, and networking business, as its new executive VP and chief financial officer. He will join Symantec on May 21. The company’s former EVP and CFO Nicholas Noviello left Symantec earlier this year on the same day it reported its third-quarter financial results.
On a call with investors on Thursday, Hill said Clark wanted to spend more time with his aging father, who is ill. Both Clark and the Symantec board of directors agreed “the next phase of executing this strategy requires both a clear laser operational focus as well as the ability to be able to extend the strategy beyond where it is today,” Hill said, according to transcripts.
When asked specifically if Clark’s departure was “in any way related to a disagreement with the board or the company, or in any way related to either the still unresolved SEC investigation or any pending litigation against the company,” Hill said “there’s no disagreement from me,” adding that Clark’s resignation is not related to the U.S. Securities and Exchange Commission (SEC) investigation.
“The reality of where we are today is: it’s been a hard slug,” Hill continued. Clark “doesn’t like to see the results that happened in the fourth quarter…and when you’re at the top of the pyramid, sometimes things happen.”
For Q4 Symantec posted net income of $34 million compared with a loss of $59 million a year earlier. However, enterprise security revenue fell to $584 million, below estimates of $607 million.
Symantec shares plunged about 16% in after-hours trading on Thursday and were down more than 13% at mid-day on Friday.
Over the next couple years under Clark, Symantec, struggling with plunging enterprise revenue and working to shed its reputation as a legacy firewall vendor, continued its cloud security expansion. It also underwent global job cuts, an internal investigation into its financial disclosures (that concluded in September 2018) and a related SEC probe (that’s ongoing), and at the end of last year Symantec President and Chief Operating Officer Michael Fey resigned, effective immediately. Additionally, Chief Marketing Officer Michael Williams and Bradon Rogers, senior vice president of the company’s Go-to-Market teams, also left the company.
Despite a rocky 2018, Symantec started the new year with a strong quarter fueled by its enterprise sales. The company’s enterprise security business generated $616 million in revenue for its third quarter of fiscal 2019, which was $31 million higher than its earlier guidance, and these strong results led Symantec to increase its enterprise security growth guidance for the full fiscal year.
The company also bought startup Luminate Security in a move that added software-defined perimeter technology to its cloud-native portfolio. And it announced a massive collaboration with other leading security vendors joining its open ecosystem and integrating with its platform. More than 120 companies including Amazon Web Services (AWS), Box, IBM Security, Microsoft, Oracle, ServiceNow, and Splunk are building or have already built more than 250 products and services that integrate with Symantec’s Integrated Cyber Defense (ICD) Platform.
Symantec seemed to be on the verge of a turnaround with its enterprise security business, but that came crashing down this week.
“I believe Symantec is facing a problem that has plagued other companies when what were once specialized technologies and skills are coopted by larger vendors looking for new business opportunities,” said Charles King, president and principal analyst at Pund-IT. “The reality for Symantec and other security vendors is that both their core markets and prospective customer pools are under pressure. That reality likely influenced Clark’s resignation and will weigh on whoever Symantec chooses as its next CEO.”