Press Releases

TEMPE, Ariz. - LifeLock, Inc. (NYSE: LOCK), an industry leader in identity theft protection, today announced financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Financial Highlights:

• Revenue: Total revenue was $159.3 million for the first quarter of 2016, up 18% from $134.4 million for the first quarter of 2015. Consumer revenue was $151.9 million for the first quarter of 2016, up 19% from $128.2 million for the first quarter of 2015. Enterprise revenue was $7.3 million for the first quarter of 2016, up 18% from $6.2 million for the first quarter of 2015.
• Net Loss: Net loss was $11.7 million for the first quarter of 2016, compared with net loss of $9.2 million for the first quarter of 2015. Net loss per diluted share was $0.12 for the first quarter of 2016 based on 94.7 million weighted-average shares outstanding, compared with net loss per diluted share of $0.10 for the first quarter of 2015 based on 94.0 million weighted-average shares outstanding.
• Adjusted Net Loss*: Adjusted net loss was $5.5 million for the first quarter of 2016, compared with adjusted net loss of $5.2 million for the first quarter of 2015. Adjusted net loss per diluted share was $0.06 for the first quarter of 2016 based on 94.7 million weighted-average shares outstanding, compared with adjusted net loss per diluted share of $0.06 for the first quarter of 2015 based on 94.0 million weighted-average shares outstanding.
• Adjusted EBITDA*: Adjusted EBITDA was $(3.0) million for the first quarter of 2016, compared with $(3.0) million for the first quarter of 2015.
• Cash Flow: Cash flow from operations was $10.9 million for the first quarter of 2016, leading to free cash flow* of $10.6 million after taking into consideration $4.8 million of capital expenditures and $2.0 million of payments for expenses incurred in connection with the FTC litigation. This compares with cash flow from operations of $20.5 million and free cash flow of $17.7 million, after taking into consideration $2.8 million of capital expenditures for the first quarter of 2015.
• Balance Sheet: Total cash and marketable securities at the end of the first quarter of 2016 was $201.8 million, down from $246.7 million at the end of the fourth quarter of 2015, primarily as a result of the $51.9 million paid in the purchase of Company stock in connection with the previously announced $100 million share repurchase plan.

* A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures".

Chief Executive Officer and President Hilary Schneider said, "We're pleased with our results for the first quarter, driven by strength in direct to consumer efforts and within our enterprise business, which posted the highest growth rates since we acquired ID Analytics in 2012." Continued Schneider, "We continue to make progress on key objectives including enhancing our position as the leader in identity theft protection, delivering innovative new products, reinforcing best in class policies and practices, and executing at the highest standards."

First Quarter 2016 & Recent Business Highlights:

• Appointed Doug Jeffries as Chief Administrative Officer. Mr. Jeffries will succeed Chris Power as the Chief Financial Officer following the release of the second quarter of fiscal 2016 financial results.
• Recorded the 44th consecutive quarter of sequential growth in revenue and cumulative ending members.
• Added approximately 345,000 gross new members in the first quarter of 2016 and ended the quarter with approximately 4.3 million members.
• Increased monthly average revenue per member to $11.90 for the first quarter of 2016 from $11.38 for the first quarter of 2015.
• Acquired 4.4 million shares for $51.9 million in connection with the previously announced $100 million share repurchase program.

Guidance:

As of April 27, 2016, we are initiating guidance for our second quarter of 2016 as well as updating guidance for the full year 2016.

• Second Quarter 2016 Guidance: Total revenue is expected to be in the range of $162 million to $164 million. Adjusted net income per diluted share is expected to be in the range of $0.03 to $0.04 based on approximately 98 million fully diluted weighted-average shares outstanding. Adjusted EBITDA is expected to be in the range of $5 million to $6 million. We will continue to migrate credit services for all premium members to a new data platform during the second quarter of 2016. With the continued migration, certain costs will be incurred in the second quarter of 2016 that in the past were recognized throughout the year. As a result, we will be incurring approximately $6 million of expense in the second quarter of 2016 which previously would have been incurred throughout the remainder of 2016. In future years, this will be an annual recurring event and will result in elevated cost of services during the second quarter and comparatively lower levels in the other quarters.
• Full Year 2016 Guidance: Total revenue is expected to be in the range of $662 million to $670 million. Adjusted net income per diluted share is expected to be in the range of $0.73 to $0.77 based on approximately 99 million fully diluted weighted-average shares outstanding and a cash tax rate of 3%. Adjusted EBITDA is expected to be in the range of $84 million to $88 million. Free cash flow is expected to be in the range of $93 million to $98 million.

Conference Call Details:

• What: LifeLock first quarter 2016 financial results.
• When: Wednesday, April 27, 2016 at 2PM PT (5PM ET).
• Dial in: To access the call in the United States, please dial (877) 407-3982, and for international callers dial (201) 493-6780. Callers may provide confirmation number 13634083 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
• Replay: A replay of the call will be available via telephone for seven days, beginning two hours after the call. To listen to the telephone replay in the United States, please dial (877) 870-5176, and for international callers dial (858) 384-5517 and enter access code 13634083.

About LifeLock

LifeLock, Inc. (NYSE:LOCK) is a leading provider of proactive identity theft protection services for consumers and consumer risk management services for enterprises. LifeLock's threat detection, proactive identity alerts, and comprehensive remediation services help provide peace of mind for consumers amid the growing threat of identity theft. Leveraging unique data, science and patented technology from ID Analytics, LLC, a wholly owned subsidiary, LifeLock offers identity theft protection that goes significantly beyond credit monitoring. As part of its commitment to help fight identity theft, LifeLock works to train law enforcement and partners with a variety of non-profit organizations to help consumers establish positive habits to combat this threat.

Forward-Looking Statements

This press release contains "forward-looking" statements, as that term is defined under the federal securities laws, including statements regarding our expected total revenue, profitability, long-term growth prospects, business performance expectations, succession plan, adjusted net income per diluted share, adjusted EBITDA, free cash flow for the second quarter of 2016 and for fiscal year 2016, and the final resolution of the FTC and consumer class action matters, along with a potential settlement with certain states' attorneys general for related claims. These forward-looking statements are based on our current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, risks associated with our ability to maintain profitability on an annual basis; our ability to protect our customers' confidential information; our ability to maintain and enhance our brand recognition and reputation; the competitive nature of the industries in which we conduct our business; our ability to retain our existing customers and attract new customers; our ability to improve our services and develop and introduce new services with broad appeal; our ability to maintain existing and secure new relationships with strategic partners; regulatory compliance; and other "Risk Factors" set forth in our most recent SEC filings.

Further information on these and other factors that could affect our financial results and the forward-looking statements in this press release is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2015, particularly under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Forms 10-Q. Copies of these documents are available on our Investor Relations website at the SEC's website at www.sec.gov.

We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

Non-GAAP Financial Measures

Our reported results include certain non-GAAP financial measures, including adjusted net income, adjusted net income per diluted share, adjusted EBITDA, and free cash flow. We calculate adjusted net income as net income (loss) excluding amortization of acquired intangible assets, share-based compensation, income tax benefits and expenses resulting from changes in our deferred tax assets, and acquisition related expenses. We calculate adjusted net income per diluted share by dividing our adjusted net income by the weighted-average diluted shares outstanding. We calculate adjusted EBITDA as net income (loss) excluding depreciation and amortization, share-based compensation, interest expense, interest income, other income (expense), income tax (benefit) expense, and acquisition related expenses. For the first quarter ended March 31, 2016, we have also excluded from adjusted net income and adjusted EBITDA expenses related to the FTC litigation. We define free cash flow as net cash provided by operating activities less net cash used in investing activities for acquisitions of property and equipment. For the first quarter ended March 31, 2016, we have added back to net cash provided by operating activities cash paid for expenses related to the FTC litigation.

We have included adjusted net income, adjusted net income per diluted share, and adjusted EBITDA in this press release because they are key measures used by us to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted net income and adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used in determining management's incentive compensation.

We have included free cash flow in this press release because we believe it typically presents a more conservative measure of cash flow as purchases of property and equipment are necessary components of ongoing operations. We believe that this non-GAAP financial measure is useful in evaluating our business because free cash flow reflects the cash surplus available to fund the expansion of our business after payment of capital expenditures relating to the necessary components of ongoing operations. We also believe that the use of free cash flow provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Although adjusted net income, adjusted EBITDA, and free cash flow are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered alongside other financial performance measures.

We have not reconciled adjusted net income per diluted share guidance to net income (loss) per diluted share guidance or adjusted EBITDA guidance to net income (loss) guidance because we do not provide guidance for share-based compensation expense, provision for income taxes, interest income, interest expense, other income and expenses, depreciation expense, amortization of intangible assets, acquisition expenses, legal reserves and settlements, or income tax (benefit) expense, which are reconciling items between net income (loss) and adjusted net income and net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of our control and/or cannot be reasonably predicted, we are unable to provide such guidance. Accordingly, reconciliation to net income (loss) is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the reconciliation tables included in this press release.