LONDON (Reuters) – Cyber security company Avast said demand for its products surged in the second quarter of 2020 as people shifted to working from home in the pandemic, helping it to meet expectations for revenue and earnings growth.
The London-listed group reported revenue of US $892.9m for 2020, up 7.1% on an organic level, and core earnings of US $495.5m, up 2.6%, with both numbers coming in slightly ahead of analysts’ average forecasts.
Chief Executive Ondrej Vlcek said demand for the company’s security, protection and privacy software spiked in the second quarter of 2020 as people moved from offices to homes.
“We never expected that surge that happened in Q2 between March and say May to last for too long,” he said in an interview.
“It only lasted for one quarter and then it went back to normal, but it helped us to acquire new customers.”
He said Avast added almost 1 million new paying customers last year, a rise of 7.9% to US $13.6m.
The top line, however, was dampened in the second half by a deliberate shift to selling customers one-year licences rather than heavily discounted multi-year deals.
“In terms of the lifetime value, we will get better value by signing those annual licences instead of two year or three year licences,” he said.
The transition to one-year subscriptions would exert downward pressure on billings this year, the company said, particularly in the first half.
Organic billings growth would also be heavily weighted toward the second half, due in part to the comparison with the spike seen in the second quarter of last year, it said.
Overall Avast said it expected to deliver 2021 organic revenue growth in the range of 6% to 8%.