Why it's happening: "While we are still early in the process," explained LifeLock CFO Chris Power, "our updated guidance assumes that the publicity from the lawsuit with the FTC will cause an increase in attrition and headwind to our new member acquisition on a short-term basis."
That's fair enough; recall just over a week ago, shares of LifeLock plummeted 49% in a single day after the FTC announced it is taking action against the company for allegedly violating a 2010 order regarding deceptive advertising and properly securing consumers' sensitive information. And though LifeLock has made it clear it disagrees and is prepared to defend itself in court, it stands to reason the FTC's action alone would be enough to hurt the company's brand and rapport with skittish consumers.
Power also insisted "Irrespective, we continue to expect the company to generate strong revenue growth and meaningful cash flow and profitability during the third quarter and full year, and we remain confident in our long-term growth prospects."
Whether that's accurate remains to be seen. But at least for now, it's clear LifeLock has plenty of work ahead to regain the full trust of its customers and investors.