Good afternoon. My name is Ian and I'll be your conference operator today. At this time, I would like to welcome everyone to the Symantec Corporation 4th Quarter Fiscal Year 2019 Earnings will come back online to assist you. Thank you. I would now like to turn the call over to Ms.
Cynthia Hiponia. Ma'am, you may begin.
Thank you. I'm Cynthia Hiponeo, vice president of Investor Relations at Symantec, and I'm pleased to welcome you to our fourth quarter and full year fiscal year 2018 earnings results. We posted the earnings materials and prepared remarks to our Investor Relations Events webpage. Speakers on today's call are Greg Clark, Symantec's CEO and Nick Noviello, EVP and CFO. This call will be available for replay via webcast on our web site.
I'd like to remind everyone that all references to financial metrics are non GAAP, unless otherwise stated. Please refer to the CFO commentary posted on the Investor Relations Web site for further definition of our non GAAP metrics. Please note non GAAP financial measures referenced during this call are reconciled to their comparable GAAP financial measure in the press release and supplemental materials posted on our website. We believe our presentation of the non GAAP financial measures when taken together with corresponding GAAP financial measures provides meaningful supplemental information regarding our operating performance for reasons discussed below. Our management team uses those non GAAP financial measures in assessing our operating results, as well as when planning forecasting and annualizing future periods.
We believe our non GAAP financial measures also facilitate comparisons of our of our performance to prior supplemental and should not be considered as a substitute for financial information presented in accordance with GAAP. Today's call contains forward looking statements based on the environment as currently see it. Those statements are based on current beliefs, assumptions, and expectations speak only as of the current date and as such, involve risks and uncertainties that may cause actual results to differ materially from our current expectations. Please refer to the cautionary statement in our press release for more information. You will also find a detailed discussion about 10 K for the fiscal year ended March 31, 2017.
Lastly, as mentioned in the company's press release, the audit committee of the Board of Directors has commenced an internal investigation and connections with concerns raised by a former employee. The Audit Committee has retained independent counsel and other advisors to assist in its investigation. The company voluntarily contacted the Securities And Exchange Commission to advise that an internal investigation is underway, and the audit committee intends to provide additional information to the SEC as the investigation proceeds. The investigation is in its early stages and the companies cannot predict the duration or outcome of the investigation. The company's financial results and guidance may be subject to change based on the outcome of the audit committee investigation.
It is unlikely that the investigation will be completed in time for the company to file its annual report on Form 10 K for the fiscal year ended March 30, 2018 in a timely manner. The investigation does not relate to any further on this topic during today's call and there will be no question and answer session following our prepared remarks. And now, I'd like to turn the call over to our CEO, Greg Clark.
Thank you for joining us and good afternoon. We were pleased with our performance in the fourth quarter in FY 2018, delivering operating results across the business above the guidance levels we provided on our last earnings call. We're also pleased that we exceeded our full year EPS guidance based on our second half performance and good results from our cost control initiatives. In Q4, our total revenue was driven by performance in both enterprise security and consumer digital safety. Our operating margin exceeded our guidance as a result of revenue growth and continued costs and operating efficiencies.
We generated strong cash flow from operations, which would benefit going forward from our continued business momentum, deferred revenue and the drop off of costs associated with our restructuring initiatives. In Enterprise Security, our integrated cyber defense platform gained traction with customers attracted to our value proposition of an integrated platform with best of breed solutions. We saw continued adoption in Q4, but our deal is greater than $1,000,000 again exceeding 100. Also had a large number of deals greater than $5,000,000 in the quarter. Our best of breed solutions were also recognized by industry analysts In FY18, we were named a leader in the Gartner Magic Quadrant for Managed Security Services, Endpoint Protection Platforms, Cloud Access Security Brokers, CASB, and Secureweb Gateway.
We are also named a leader in the IDC Marketscape from Mogo Threat Management in FY18. As we've discussed on prior calls, to grow our enterprise business, we focused on integrating our enterprise sales force and our product offerings to bring to customers an integrated cyber defense platform. We believe our 3rd fourth quarter results indicate the successful integration of our sales force and the success of our integrated cyber defense platform strategy. Now turning to the market and how we are doing with customers. The trend that I described in our last earnings call of increased cross selling in our Enterprise Security segment continued to gain strength this quarter.
Enterprise customers are buying more of our products and solutions, embedding us airport and edge security architectures, and simplifying their environments, cutting costs by consolidating around our platform. The rising awareness of long term challenges and higher costs associated with sustaining many fragmented solutions across the enterprise is expensive and fragile. This has created opportunities within our installed base and with new customers for the platform and product integrations we provide. We are pleased with the adoption of our cloud based network and web security products, driven by sales to new customers, cross selling our cloud based products into our installed base, and displacing cloud solutions of native cloud incumbent competitors within existing and new accounts. I would like to cover some examples that illustrate the trends we are seeing in our Enterprise Security segment.
In the 4th quarter, We had a new customer dropdown platform in a 7 figure deal. 1 of the 10 largest banks in the U. S. Found itself struggling with an overly complex and expensive global security detection. The customer turned to our integrated cyber defense platform purchasing data loss prevention, advanced threat protection, web isolation from our Fire Glass acquisition, data center security, set EGP, business critical services, and professional services.
In the process, we displaced the DLT solution and endpoint protection offering of 2 separate incumbent competitors. This is just one of many examples of customer transactions driven in part by the need to cut complexity and costs from the security stack while improving performance. Another critical need for enterprise customers is ensuring compliance and security in the cloud. This is a rising priority for customers who must contend with In the fourth quarter, we also closed an 8 figure deal with a large global professional services company that adopted solutions throughout our Web security stack, including CASB, cloud proxy, cloud DLP, and Symantec endpoint protection mobile. We displaced the CASB and web filtering offerings of 2 then With one of the most mobile and geographically dispersed work forces in the world, this customer needed a way to keep their data safe while enabling easy access and information sharing across the hundreds of thousands of routing employees.
We also had another new customer win during the fourth quarter with a Fortune 500 enterprise software company that turned to us for help with their advanced threat and forensic security requirements across our cloud infrastructure. This 8 figure deal included security analytics and our encrypted traffic management product. Turning to Consumer Digital Safety with 40% of U. S. Citizens affected by a cyber issue last year, consumers are moving beyond device security and focusing on protecting their entire life.
The core tenets of our consumer digital safety platform of malware, identity protection, and privacy, which are center of mind in consumer populations. This category of digital safety is playing out favorably in FY18 and we have seen our competitors attempt to copy our strategy and partners are beginning to realize it's a better proposition for the customers than a malware centered security tool. We believe consumers are seeing the value in their bundled offerings, which offer protection across device, information and identity, We expect that growth in FY2019 will be driven by further integration of our offerings and increased marketing to drive consumer awareness of our consumer digital safety platform. In summary, we are pleased with our performance in FY18 across both of our segments. Nick will now discuss our financial results in more detail and provide our outlook.
Thank you, Greg and good afternoon, everyone. All references to financial metrics are non GAAP unless otherwise stated. Please note, we've posted information on our financial metrics as well as other tables and reconciliations of GAAP to non GAAP metrics in our supplemental materials and CFO commentary to our Investor Relations website. I will start with Recall that the 1st 3 quarters of fiscal year 2018 fiscal year 2017 include results from our WSS PKI solutions that we divested in Q3. For comparative purposes, Our organic growth rates discussed are adjusted for acquisitions and divestitures.
As Greg mentioned in his comments, we were pleased with our performance in the fourth quarter, with both enterprise security and consumer digital safety revenues above our prior guidance. Looking at organic revenue growth in constant currency adjusted for acquisitions and divestitures, total company year over year revenue growth was 4%. This included Enterprise Security segment growth of 1% and Consumer Digital Safety segment growth of 6%. At the same time, year over year deferred revenue adjusted for acquisitions and divestitures was up 21% for the total company 34% in our Enterprise Security segment and 3% in our Consumer Digital Safety segment. We look at the combination of in quarter recognized revenue and deferred revenue as a strong indicator of the health of our business segments.
In our Enterprise Security segment in the 4th quarter, over 80% of our business was ratable. Our Q4 implied billing was $937,000,000. Contract duration for our ratable business was approximately 18.5 months in Q4, up from slightly under 18 months and approximately 15.5 months in Q1. We calculate contract duration as total order value divided by annual order value for ratable orders with a term of 1 year or more. Due to integration activities at again in Q1 fiscal year 2018, we are not able to provide comparable duration metrics in fiscal year 2017.
Contract duration impacts imply billings growth, and we expect our contract duration will continue to increase during fiscal year 2019. This increase is due to our partially offset by our substantial renewal business where we typically sell 1 year contracts. We expect that the implementation of With respect to our deferred revenue as of March 30, 2018, as we look into fiscal year 2019 beyond, If the revenue recognition standard in effect in fiscal year 2018 had continued to apply after fiscal year 2018, We believe approximately 85 percent of our total enterprise security deferred revenue would be recognized into revenue over 24 months, and approximately 95% over 36 months. And we believe approximately 1 third of our enterprise security short term deferred revenue balance would be recognized in revenue in Let me now turn to our In the fourth quarter, our direct $2 per month, up approximately 3% from Q3. We expect these direct customer statistics to represent approximately 90% of our revenue stream at any point in time.
Total company operating margin for the fourth quarter was 36.5%. The year over year improvement in operating margin Fully diluted earnings per share was $0.46, primarily driven by higher operating income. Please see the dilution tables posted to our Investor Relations website, where you can see the impact to diluted share count from the convertible notes at various stock prices. Turning to full fiscal year currency adjusted for acquisitions and divestitures was 2%. This included flat revenue for enterprise security, and 3% revenue growth for Consumer Digital Safety.
At our Financial Analyst Day last year, we stated we would supplement our quarterly metric with annual metrics for our Consumer Digital Safety segment around retention and digital safety adoption. These metrics are defined in the supplemental CFO commentary posted to the Investor Relations website. For fiscal year 2018, Our annual retention rate was approximately 83% and our digital safety adoption was approximately 11%. We believe both are evidence of the value of our digital safety strategy with consumers. Operating margin for the full fiscal year 2018 was 34.7% as compared to 28.7 percent in fiscal year 2017.
This year over year improvement reflects our top line revenue growth as well as operating efficiencies. Fully diluted earnings per share was $1.69, up 43% year over year. We generated cash flow from operating activities in the fiscal year of $950,000,000 and CapEx was $142,000,000 We significantly reduced the principal amount of debt over the fiscal year from approximately $8,300,000,000 to $5,100,000,000, with $1,750,000,000 of the year end balance comprised of convertible notes. We exited the fiscal year with approximately $2,200,000,000 in cash and short term investments. Looking back on fiscal year 2018, each of our enterprise security and consumer digital safety segments successfully leveraged cross sell and up sell opportunities within our installed base, which you can see in our revenue and deferred revenue growth.
We realigned integrated and added capacity to our enterprise sales force. We achieved our cost savings and integration synergies ahead of schedule, we significantly deleveraged our balance sheet. We enter fiscal year 2019 with industry leading platforms in both enterprise and consumer a continued focus on operating efficiency, a stronger balance sheet and cash generating capability. Our forecast model for fiscal year 2019 is based on the revenue recognition standard in effect in fiscal year 2018. We are not updating guidance at this point for affected at the beginning of Q1 fiscal year 2019 on a modified retrospective basis.
We expect the adoption of the new revenue standard will impact the pattern of revenue recognition Each quarter, we will be disclosing the impact of the adoption of the new revenue recognition standard on our operating results and the balance sheet as well as our achievement against revenue guidance provided on the previous standard. In fiscal year 2019, we anticipate that our shift to a more ratable based enterprise business will continue. While we expect this ratable shift to lower in period revenue in the near term we believe it will segment, our integrated bundled offerings provide consumers with a broad suite of digital safety options. We expect to further enhance our bundled offerings in fiscal year 2019 and drive further retention and adoption. Before I transition to financial guidance, our organic growth rates discussed going forward will be adjusted for the WSS TKI divestiture.
We are forecasting fiscal year 2019 revenue in the range of $4,760,000,000 to $4,900,000,000 comprised of $2,325,000,000 to $2,425,000,000 in enterprise security and $2,435,000,000 to $2,475,000,000 in consumer digital safety. At the midpoint, on an organic basis, our guidance suggests flat revenue for the total company, a decline of 2% for enterprise security, and just over 3% growth for consumer digital safety. You can see our revenue and deferred revenue details in our supplemental tables. Based on the revenue recognition standard in effect in fiscal year 2018, we expect higher revenue in enterprise security in the second half of the year, compared to the first half of $1,135,000,000 to 1 $165,000,000, comprised of 5 35,000,000 to $555,000,000 in Enterprise Security and $600,000,000 to $610,000,000 in Consumer Digital Safety. At the midpoint, our guidance on an organic basis suggests flat year over year revenue for the total company, a decline in enterprise security and growth in consumer digital safety.
We believe the forecasted year over year decline in enterprise security revenue be primarily attributed to a lower mix of business yielding in period revenue and other contributors including increased contract duration and timing of maintenance renewals. In fiscal year 2019, implied billings and contract duration will be important metrics of the growth of this segment and we will continue to report on them each quarter. We are forecasting operating margin in fiscal year 2019 to be in the range of 30% to 32% with enterprise security margins in the low teens and consumer digital safety margins of approximately 50%. As we look at our operating margin in fiscal year 2018, and compare it to our forecast for fiscal year 2019, we believe total operating margin will be negatively impacted by just over one point due to the WSS PKI divestiture as well as additional investments we are planning to make partially offset by revenue growth. We are forecasting operating margin in with enterprise security margins impacted by higher costs versus Q4 and lower revenue.
As a result of U. S. Tax reform, we expect our effective tax rate in fiscal year 2019 to be approximately 20.4% lower than the 21% to 22% range we discussed on our last earnings call. We are forecast non GAAP EPS for fiscal year 2019 in the range of $1.50 to $1.65. Our fiscal year 2019 EPS forecast compared to fiscal year 2018 reflects higher revenue and a lower tax rate, partially offset by BWSS PKI divestiture, and increased spend investments to drive revenue growth.
Our Q1 fiscal year 2019 EPS forecast is in the range of to be in the range of $1,300,000,000 Turning to capital allocation. Our strategy is to balance driving shareholder returns, managing financial risk and preserving our flexibility to pursue strategic options including M And A. On our last call, we discussed our opportunity to repatriate or otherwise utilize just over $1,000,000,000 of international cash as a result of US tax reform. This process started in Q4. At the end of fiscal year 2018, $1,100,000,000 of our total principal amount of debt consisted of prepayable term loans.
We expect to continue to focus on debt repayment in fiscal year 2019. Consistent with our capital allocation strategy, we also continue to focus on share repurchase and have an existing $800,000,000 share repurchase authorization. We also plan to continue We continue to believe successfully integrate and bring to market technologies from tuck in acquisitions such as Fireglass and SkyCure, as well as execute on large transactions, such as Blue Coat And LifeLock. Looking forward, our balance sheet provides us with ability to continue to evaluate opportunities that makes sense for the long term value of Symantec. Now let me turn the call back to Greg for some closing remarks.
As I look back on the fiscal year 2018, I'm pleased with how we executed for the year. When we launched our new go to market strategy in enterprise at the beginning of fiscal year 2018, we had a vision of how a sales force could market and sell our integrated Private Defense Platform. Our strategy is resonating with customers. Enterprise customers are designing us into their security architectures and adopting our platform. As our customer workloads move to the cloud, we have launched a suite of cloud hosted products ranging from CASB, WSS and DLP in the cloud to bring security into the cloud as our customers make this transition.
Subscription based ratable form factors of our on premise solutions based on their evolving buying preference for cloud and subscription form factors. And the breadth and differentiation of our solutions. Our FY2019 guidance reflects our expectation that our enterprise security segment revenue will become more ratable on an annualized basis in FY19 compared to FY18. In our Consumer Digital Safety segment, our goal in FY18 was to start to leverage the significant cross sell up Tuney at the Norton And LifeLock installed base and transformed the traditionally PC centric business to a growing consumer digital safety category. We accomplished this with a platform that includes endpoint security, mobile, identity protection, WiFi, private and cyber safety in the home.
In FY18, our Consumer Digital Safety segment experienced rising ARPU with an annual retention rate of approximately 83% and digital safety adoption rate of approximately 11%. These statistics validate that our strategy, cyber safety platform, that includes protecting against malware and identity theft, and enhanced privacy in cyberspace is resonating in the market. In summary, fiscal 2018 was a significant year in cement Corporate Evolution, the latest chapter of which started with the divestiture of Veritas in fiscal year 2016, Since then, Symantec has undertaken 2 transformational acquisitions with BlueCo and LifeLock, while delivering substantial margin improvement. The last year, Symantec continued to sharpen its strategic focus by divesting its website security and PKI offerings to Digicet and completing several tuck in acquisitions, including 5 BOS and SKICARE. We believe our strategy to drive organic growth and leverage our scale, innovation and capital to create industry leading platform solutions across our enterprise and consumer segments is working.
You for joining us this afternoon.
Ladies and gentlemen, this does conclude the Symantec Corporation's 4th quarter fiscal year 19 earnings call. You may now disconnect.