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LifeLock (NYSE: LOCK) reported second-quarter results on Aug. 2. The ID theft protection services provider continues to add new members, but the cost of acquiring them has risen significantly.
LifeLock results: The raw numbers
YOY = year over year. Data source: LifeLock Q2 2016 earnings.
What happened with LifeLock this quarter?
Total revenue rose 13% year over year to $164.4 million, with consumer revenue increasing 13% to $156.7 million and enterprise revenue jumping 17% to $7.8 million.
Helping to drive consumer revenue higher was a 9% rise in members, which ended the first quarter at 4.4 million. The 304,000 gross new members added in Q2 made it the 45th consecutive quarter of sequential growth in cumulative ending members.
LifeLock's monthly average revenue per member continued its ascent, rising to $11.97 from $11.90 in the first quarter and $11.68 in the year-ago period. Yet LifeLock's customer retention declined to 85.6%, down from 87.1% in the second quarter of 2015.
In addition, Lifelock's average customer acquisition cost rose to $260 in the second quarter, up from $250 in the first quarter and $210 in Q2 2015. This was primarily due to the fact that LifeLock's higher-cost direct-to-consumer channel contributed a larger proportion of the company's gross new member additions in the most recent quarter, as customer contributions from LifeLock's partner channel "remained under pressure."
All told, net income -- adjusted to exclude share-based compensation and non-recurring items -- was $6.3 million versus $10 million in the second quarter of 2015. Adjusted earnings per share also declined to $0.07 from $0.10 in the year-ago period.
LifeLock's management gave guidance for the third quarter, including total revenue in the range of $167 million to $169 million and adjusted earnings per share of $0.34 to $0.35.It also reiterated its full-year revenue outlook of $662 million to $670 million and boosted its 2016 adjusted EPS forecast to $0.74 to $0.78, up from its prior guidance of $0.73 and $0.77.
"We are pleased with our revenue and profits results, which exceeded our guidance in the quarter, driven by strong new member acquisition, solid retention, increased adoption of premium products and continued growth of our ID Analytics business," said CEO Hilary Schneider. "Our ability to meaningfully differentiate our products through our technology platform, our superior brand awareness and our outstanding serviceto our members provide a strong foundation for increasing shareholder value."
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