What Led to McAfee Corp (NASDAQ: MCFE) Stock Crash?

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McAfee Corp (NASDAQ: MCFE) stock fell over 15.2% since its listing in October (Source: Finviz).

However, the company in the third quarter of FY 20 has reported a decent performance, showing 10% rise in the total net revenue to $728 million. The company had recently closed initial public offering of 37 million shares and used a portion of the net proceeds to pay down second lien debt of $525 million. The company has expanded its relationship with one of the top 3 mobile service providers in North America. The company has also expanded its relationship with Amazon.

Moreover, for the third quarter consumer revenue grew 23% to $395 million. Enterprise revenue for the third quarter was $333 million, with the percentage of revenue from core Enterprise customers remaining more than 80 percent of total Enterprise revenue. McAfee has reported breakeven net income for the third quarter. Total operating income for the quarter grew 142% to $128 million. Operating income margins had more than doubled to 17.6%. Operating income for Consumer rose 49% to $106 million. Operating income for Enterprise was $22 million, which reflects an increase of $40 million from the prior year period. The company delivered the total adjusted EBITDA for the quarter of $265 million, which represents 26% growth. Adjusted EBITDA margins had expanded by 470 basis points to 36.4 percent. Adjusted EBITDA for Consumer increased 26% to $181 million. Adjusted EBITDA for Enterprise was $84 million, which represents an increase of 27%. Adjusted EBITDA margin for Enterprise also saw significant year over year improvement, reaching at 25.2 percent compared to 19.4 percent in the comparable period.

On the other hand, MCFE has announced the MVISION Cloud Native Application Protection Platform (CNAPP) with several native Amazon Web Services (AWS) integrations for helping the customers more easily secure their applications and data in their Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) environments. MVISION CNAPP is a new McAfee security service that integrates Cloud Security Posture Management (CSPM), Cloud Workload Protection Platform (CWPP), and application and data security into one solution. The unified solution will offer security teams deep insight into service configurations for AWS, industry benchmarks to better assess their data and application security risk, as well as integrated workload protection tools for the improvement of security across their entire application lifecycle.

For the fourth quarter, the company expects total Revenue to be in the range of $732 million to $742 million and total Adjusted EBITDA to be in the range of $254 million to $264 million.

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