LifeLock (NYSE:LOCK) seems to be at the right place at the right time. Offering ID theft monitoring services as retailers keep making headlines for all of the wrong reasons when their customer data gets breached sounds like a winning model in theory, but it's also translating on paper. LifeLock delivered fresh financials after Wednesday's market close, and the report was encouraging.
Revenue soared 29% during the third quarter to $123 million as a combination of a 23% pop in members and a 7% uptick in average revenue per member drove the top-line spurt. LifeLock closed out the quarter with 3.52 million members paying an average of $11.22 a month. It has signed more members than it has lost for 38 consecutive quarters, and that's an impressive streak for any premium platform.
Adjusted net income soared 37% to $0.16 a share. Analysts were holding out for an adjusted profit of only $0.15 a share on $120.7 million in revenue.
This will probably always be a high-turnover service. Folks flock to LifeLock when they fear that their ID is at risk, only to cut ties when the coast is clear. But LifeLock is also stickier than that scenario seems to suggest. Its retention rate has clocked in above 87% for eight consecutive quarters.
LifeLock's outlook for the current quarter is healthy. It sees revenue of $127 million to $129 million and an adjusted profit per share of $0.26 or $0.27. Wall Street was holding out for net income of $0.26 a share on $126.7 million in revenue.
It wasn't just earnings on the plate at LifeLock on Wednesday afternoon. It introduced a beta test for its new LifeLock Privacy Monitor service just minutes before breaking out its financial results. The new offering allows folks to remove or suppress their name, address, age, and other personal information from some people-search sites and Internet advertisers.
LifeLock will be offering the new service for free. It may seem odd to be offering a complimentary platform. This is a company that has prided itself on three distinct premium tiers for ID theft monitoring. However, LifeLock Privacy Monitor is also a great way to offer consumers something valuable in exchange for a shot at extending that relationship into LifeLock's flagship services that aren't free. LifeLock talked up the "upside funnel" of not charging for the privacy-monitoring offering even after it leaves beta testing, as a way to educate users on the merits of privacy and ID theft protection.
Beating Wall Street's estimates for the third quarter on both ends of the income statement, offering an outlook that's ahead of where analysts are standing, and introducing a new service that will help enhance the LifeLock brand: That's a win on all three fronts.