Lock

Image source: LifeLock.

LifeLock (NYSE:LOCK) reported third-quarter results on Nov. 1. The ID theft-protection services provider returned to GAAP profitability nearly a year after its settlement with the FTC.

LifeLock results: The raw numbers

 Metric

Q3 2016

Q3 2015

Growth (YOY)

Revenue

$170.294 million

$151.952 million

12%

Net income

$14.402 million

($65.145 million)

N/A

Earnings per share

$0.15

($0.68)

N/A

YOY = year over year. Data source: LifeLock Q3 2016 earnings press release.

What happened with LifeLock this quarter?

Total revenue increased 12% year over year to $170.3 million, with consumer revenue rising 12% to $161.7 million and enterprise revenue leaping 18% to $8.6 million.

LifeLock added 254,000 gross new members in the third quarter and ended the period with 4.4 million members. That represented growth of 8% compared with the year-ago quarter and marked Q3 2016 as LifeLock's 46th consecutive quarter of sequential growth in cumulative ending members.

Those members continue to show a willingness to pay more for LifeLock's services, with monthly average revenue per user (ARPU) increasing to $12.25 from $11.97 in the second quarter and $11.91 in the third quarter of 2015.

However, LifeLock's customer retention declined to 85.5%, down from 86.6% in the prior-year period. Additionally, LifeLock's average customer acquisition cost rose 8% year over year to $255; CFO Doug Jeffries said on a conference call with analysts that this rise was partially due to higher advertising prices related to the presidential election.

All told, net income rose to $14.4 million, up from a loss of $65.1 million in Q3 2015, which was affected by a $96 million charge related to LifeLock's settlement with the FTC. On an adjusted basis, net income jumped 21% to $33.5 million, or $0.34 per share.

Looking forward

LifeLock issued guidance for the fourth quarter, including total revenue of $172 million to $174 million and adjusted earnings per share of $0.40 to $0.42.

In turn, LifeLock tightened its full-year revenue forecast to a range of $666 million to $668 million -- versus prior estimates of $662 million to $670 million -- and raised its 2016 adjusted EPS forecast to between $0.76 and $0.78, from a range of $0.74 to $0.78.

"In 2017, we look forward to further leveraging our strong brand, optimizing our marketing spend across go-to market channels for efficient growth, focusing on customer success with increased consumer engagement with the new LifeLock platform, and launching new products and features to drive member growth and ARPU," added CEO Hilary Schneider.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends LifeLock. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.